Correlation Between Gaztransport Technigaz and Meli Hotels
Can any of the company-specific risk be diversified away by investing in both Gaztransport Technigaz 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 Gaztransport Technigaz and Meli Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gaztransport Technigaz SA and Meli Hotels International, you can compare the effects of market volatilities on Gaztransport Technigaz 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 Gaztransport Technigaz with a short position of Meli Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaztransport Technigaz and Meli Hotels.
Diversification Opportunities for Gaztransport Technigaz and Meli Hotels
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gaztransport and Meli is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Gaztransport Technigaz 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 Gaztransport Technigaz 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 Gaztransport Technigaz 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 Gaztransport Technigaz i.e., Gaztransport Technigaz and Meli Hotels go up and down completely randomly.
Pair Corralation between Gaztransport Technigaz and Meli Hotels
Assuming the 90 days horizon Gaztransport Technigaz SA is expected to generate 0.99 times more return on investment than Meli Hotels. However, Gaztransport Technigaz SA is 1.01 times less risky than Meli Hotels. It trades about 0.04 of its potential returns per unit of risk. Meli Hotels International is currently generating about 0.04 per unit of risk. If you would invest 10,639 in Gaztransport Technigaz SA on September 12, 2024 and sell it today you would earn a total of 2,154 from holding Gaztransport Technigaz SA or generate 20.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gaztransport Technigaz SA vs. Meli Hotels International
Performance |
| Timeline |
| Gaztransport Technigaz |
| Meli Hotels International |
Gaztransport Technigaz and Meli Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gaztransport Technigaz and Meli Hotels
The main advantage of trading using opposite Gaztransport Technigaz and Meli Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaztransport Technigaz 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.| Gaztransport Technigaz vs. Tenaris SA | Gaztransport Technigaz vs. NOV Inc | Gaztransport Technigaz vs. Superior Plus Corp | Gaztransport Technigaz vs. SIVERS SEMICONDUCTORS AB |
| Meli Hotels vs. Hyatt Hotels | Meli Hotels vs. InterContinental Hotels Group | Meli Hotels vs. INTERCONT HOTELS | Meli Hotels vs. Wyndham Hotels Resorts |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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