Correlation Between Apollo Medical and MELIA HOTELS
Can any of the company-specific risk be diversified away by investing in both Apollo Medical 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 Apollo Medical and MELIA HOTELS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apollo Medical Holdings and MELIA HOTELS, you can compare the effects of market volatilities on Apollo Medical 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 Apollo Medical with a short position of MELIA HOTELS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apollo Medical and MELIA HOTELS.
Diversification Opportunities for Apollo Medical and MELIA HOTELS
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Apollo and MELIA is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Medical Holdings and MELIA HOTELS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MELIA HOTELS and Apollo Medical 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 Apollo Medical Holdings 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 Apollo Medical i.e., Apollo Medical and MELIA HOTELS go up and down completely randomly.
Pair Corralation between Apollo Medical and MELIA HOTELS
Assuming the 90 days horizon Apollo Medical Holdings is expected to generate 1.02 times more return on investment than MELIA HOTELS. However, Apollo Medical is 1.02 times more volatile than MELIA HOTELS. It trades about 0.04 of its potential returns per unit of risk. MELIA HOTELS is currently generating about 0.04 per unit of risk. If you would invest 2,802 in Apollo Medical Holdings on August 30, 2024 and sell it today you would earn a total of 1,178 from holding Apollo Medical Holdings or generate 42.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Apollo Medical Holdings vs. MELIA HOTELS
Performance |
| Timeline |
| Apollo Medical Holdings |
| MELIA HOTELS |
Apollo Medical and MELIA HOTELS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apollo Medical and MELIA HOTELS
The main advantage of trading using opposite Apollo Medical and MELIA HOTELS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apollo Medical 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's long position.| Apollo Medical vs. Apple Inc | Apollo Medical vs. Apple Inc | Apollo Medical vs. Apple Inc | Apollo Medical vs. Apple Inc |
| MELIA HOTELS vs. Apple Inc | MELIA HOTELS vs. Apple Inc | MELIA HOTELS vs. Superior Plus Corp | MELIA HOTELS vs. SIVERS SEMICONDUCTORS AB |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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