Correlation Between Melia Hotels and TR Property
Can any of the company-specific risk be diversified away by investing in both Melia Hotels and TR Property 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 TR Property into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Melia Hotels and TR Property Investment, you can compare the effects of market volatilities on Melia Hotels and TR Property 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 TR Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Melia Hotels and TR Property.
Diversification Opportunities for Melia Hotels and TR Property
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Melia and TRY is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Melia Hotels and TR Property Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TR Property Investment 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 TR Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TR Property Investment has no effect on the direction of Melia Hotels i.e., Melia Hotels and TR Property go up and down completely randomly.
Pair Corralation between Melia Hotels and TR Property
Assuming the 90 days trading horizon Melia Hotels is expected to generate 0.92 times more return on investment than TR Property. However, Melia Hotels is 1.08 times less risky than TR Property. It trades about 0.0 of its potential returns per unit of risk. TR Property Investment is currently generating about -0.14 per unit of risk. If you would invest 679.00 in Melia Hotels on August 31, 2024 and sell it today you would lose (1.00) from holding Melia Hotels or give up 0.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Melia Hotels vs. TR Property Investment
Performance |
| Timeline |
| Melia Hotels |
| TR Property Investment |
Melia Hotels and TR Property Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Melia Hotels and TR Property
The main advantage of trading using opposite Melia Hotels and TR Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Melia Hotels position performs unexpectedly, TR Property 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 TR Property will offset losses from the drop in TR Property's long position.| Melia Hotels vs. Blackstone Loan Financing | Melia Hotels vs. Associated British Foods | Melia Hotels vs. Lowland Investment Co | Melia Hotels vs. Intuitive Investments Group |
| TR Property vs. Eastman Chemical Co | TR Property vs. American Tower REIT | TR Property vs. Ameriprise Financial | TR Property vs. Ibstock PLC |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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