Correlation Between MOVIE GAMES and Meli Hotels
Can any of the company-specific risk be diversified away by investing in both MOVIE GAMES and Meli 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 MOVIE GAMES and Meli Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MOVIE GAMES SA and Meli Hotels International, you can compare the effects of market volatilities on MOVIE GAMES and Meli 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 MOVIE GAMES with a short position of Meli Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of MOVIE GAMES and Meli Hotels.
Diversification Opportunities for MOVIE GAMES and Meli Hotels
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MOVIE and Meli is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding MOVIE GAMES SA and Meli Hotels International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meli Hotels International and MOVIE GAMES 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 MOVIE GAMES SA are associated (or correlated) with Meli Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meli Hotels International has no effect on the direction of MOVIE GAMES i.e., MOVIE GAMES and Meli Hotels go up and down completely randomly.
Pair Corralation between MOVIE GAMES and Meli Hotels
Assuming the 90 days horizon MOVIE GAMES SA is expected to generate 3.55 times more return on investment than Meli Hotels. However, MOVIE GAMES is 3.55 times more volatile than Meli Hotels International. It trades about 0.13 of its potential returns per unit of risk. Meli Hotels International is currently generating about -0.1 per unit of risk. If you would invest 378.00 in MOVIE GAMES SA on November 2, 2024 and sell it today you would earn a total of 42.00 from holding MOVIE GAMES SA or generate 11.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MOVIE GAMES SA vs. Meli Hotels International
Performance |
| Timeline |
| MOVIE GAMES SA |
| Meli Hotels International |
MOVIE GAMES and Meli Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MOVIE GAMES and Meli Hotels
The main advantage of trading using opposite MOVIE GAMES and Meli Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MOVIE GAMES position performs unexpectedly, Meli 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 Meli Hotels will offset losses from the drop in Meli Hotels' long position.| MOVIE GAMES vs. MOLSON RS BEVERAGE | MOVIE GAMES vs. Aegean Airlines SA | MOVIE GAMES vs. Singapore Airlines Limited | MOVIE GAMES vs. SINGAPORE AIRLINES |
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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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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