Correlation Between Gruppo MutuiOnline and Melia Hotels
Can any of the company-specific risk be diversified away by investing in both Gruppo MutuiOnline and Melia Hotels 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 Gruppo MutuiOnline and Melia Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gruppo MutuiOnline SpA and Melia Hotels, you can compare the effects of market volatilities on Gruppo MutuiOnline and Melia Hotels 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 Gruppo MutuiOnline with a short position of Melia Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gruppo MutuiOnline and Melia Hotels.
Diversification Opportunities for Gruppo MutuiOnline and Melia Hotels
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gruppo and Melia is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Gruppo MutuiOnline SpA and Melia Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Melia Hotels and Gruppo MutuiOnline 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 Gruppo MutuiOnline SpA are associated (or correlated) with Melia Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Melia Hotels has no effect on the direction of Gruppo MutuiOnline i.e., Gruppo MutuiOnline and Melia Hotels go up and down completely randomly.
Pair Corralation between Gruppo MutuiOnline and Melia Hotels
Assuming the 90 days trading horizon Gruppo MutuiOnline SpA is expected to generate 24.11 times more return on investment than Melia Hotels. However, Gruppo MutuiOnline is 24.11 times more volatile than Melia Hotels. It trades about 0.14 of its potential returns per unit of risk. Melia Hotels is currently generating about 0.06 per unit of risk. If you would invest 3,160 in Gruppo MutuiOnline SpA on September 12, 2024 and sell it today you would earn a total of 645.00 from holding Gruppo MutuiOnline SpA or generate 20.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 60.8% |
| Values | Daily Returns |
Gruppo MutuiOnline SpA vs. Melia Hotels
Performance |
| Timeline |
| Gruppo MutuiOnline SpA |
| Melia Hotels |
Gruppo MutuiOnline and Melia Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gruppo MutuiOnline and Melia Hotels
The main advantage of trading using opposite Gruppo MutuiOnline and Melia Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gruppo MutuiOnline position performs unexpectedly, Melia Hotels 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 Melia Hotels will offset losses from the drop in Melia Hotels' long position.| Gruppo MutuiOnline vs. Hong Kong Land | Gruppo MutuiOnline vs. Neometals | Gruppo MutuiOnline vs. Coor Service Management | Gruppo MutuiOnline vs. Fidelity Sustainable USD |
| Melia Hotels vs. Hong Kong Land | Melia Hotels vs. Neometals | Melia Hotels vs. Coor Service Management | Melia Hotels vs. Fidelity Sustainable USD |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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