Correlation Between INDO RAMA and MELIA HOTELS
Can any of the company-specific risk be diversified away by investing in both INDO RAMA 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 INDO RAMA and MELIA HOTELS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INDO RAMA SYNTHETIC and MELIA HOTELS, you can compare the effects of market volatilities on INDO RAMA 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 INDO RAMA with a short position of MELIA HOTELS. Check out your portfolio center. Please also check ongoing floating volatility patterns of INDO RAMA and MELIA HOTELS.
Diversification Opportunities for INDO RAMA and MELIA HOTELS
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between INDO and MELIA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding INDO RAMA SYNTHETIC and MELIA HOTELS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MELIA HOTELS and INDO RAMA 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 INDO RAMA SYNTHETIC 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 INDO RAMA i.e., INDO RAMA and MELIA HOTELS go up and down completely randomly.
Pair Corralation between INDO RAMA and MELIA HOTELS
If you would invest 686.00 in MELIA HOTELS on October 30, 2024 and sell it today you would earn a total of 9.00 from holding MELIA HOTELS or generate 1.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
INDO RAMA SYNTHETIC vs. MELIA HOTELS
Performance |
| Timeline |
| INDO RAMA SYNTHETIC |
| MELIA HOTELS |
INDO RAMA and MELIA HOTELS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INDO RAMA and MELIA HOTELS
The main advantage of trading using opposite INDO RAMA and MELIA HOTELS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INDO RAMA 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.The idea behind INDO RAMA SYNTHETIC and MELIA HOTELS pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| MELIA HOTELS vs. UPDATE SOFTWARE | MELIA HOTELS vs. Kingdee International Software | MELIA HOTELS vs. Mount Gibson Iron | MELIA HOTELS vs. RELIANCE STEEL AL |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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