Correlation Between Melia Hotels and OneSavings Bank
Can any of the company-specific risk be diversified away by investing in both Melia Hotels and OneSavings Bank at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Melia Hotels and OneSavings Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Melia Hotels and OneSavings Bank PLC, you can compare the effects of market volatilities on Melia Hotels and OneSavings Bank and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Melia Hotels with a short position of OneSavings Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Melia Hotels and OneSavings Bank.
Diversification Opportunities for Melia Hotels and OneSavings Bank
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Melia and OneSavings is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Melia Hotels and OneSavings Bank PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OneSavings Bank PLC and Melia Hotels is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Melia Hotels are associated (or correlated) with OneSavings Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OneSavings Bank PLC has no effect on the direction of Melia Hotels i.e., Melia Hotels and OneSavings Bank go up and down completely randomly.
Pair Corralation between Melia Hotels and OneSavings Bank
Assuming the 90 days trading horizon Melia Hotels is expected to generate 0.71 times more return on investment than OneSavings Bank. However, Melia Hotels is 1.41 times less risky than OneSavings Bank. It trades about 0.11 of its potential returns per unit of risk. OneSavings Bank PLC is currently generating about -0.01 per unit of risk. If you would invest 659.00 in Melia Hotels on August 29, 2024 and sell it today you would earn a total of 33.00 from holding Melia Hotels or generate 5.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Melia Hotels vs. OneSavings Bank PLC
Performance |
| Timeline |
| Melia Hotels |
| OneSavings Bank PLC |
Melia Hotels and OneSavings Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Melia Hotels and OneSavings Bank
The main advantage of trading using opposite Melia Hotels and OneSavings Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Melia Hotels position performs unexpectedly, OneSavings Bank can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in OneSavings Bank will offset losses from the drop in OneSavings Bank's long position.| Melia Hotels vs. Lendinvest PLC | Melia Hotels vs. Neometals | Melia Hotels vs. Coor Service Management | Melia Hotels vs. Albion Technology General |
| OneSavings Bank vs. Toyota Motor Corp | OneSavings Bank vs. Lendinvest PLC | OneSavings Bank vs. Neometals | OneSavings Bank vs. Coor Service Management |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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