Correlation Between Amplifon SpA and Meli Hotels
Can any of the company-specific risk be diversified away by investing in both Amplifon SpA 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 Amplifon SpA and Meli Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amplifon SpA and Meli Hotels International, you can compare the effects of market volatilities on Amplifon SpA 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 Amplifon SpA with a short position of Meli Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amplifon SpA and Meli Hotels.
Diversification Opportunities for Amplifon SpA and Meli Hotels
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Amplifon and Meli is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Amplifon SpA 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 Amplifon SpA 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 Amplifon SpA 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 Amplifon SpA i.e., Amplifon SpA and Meli Hotels go up and down completely randomly.
Pair Corralation between Amplifon SpA and Meli Hotels
Assuming the 90 days horizon Amplifon SpA is expected to generate 1.22 times less return on investment than Meli Hotels. But when comparing it to its historical volatility, Amplifon SpA is 1.09 times less risky than Meli Hotels. It trades about 0.03 of its potential returns per unit of risk. Meli Hotels International is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 595.00 in Meli Hotels International on September 12, 2024 and sell it today you would earn a total of 116.00 from holding Meli Hotels International or generate 19.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 48.12% |
| Values | Daily Returns |
Amplifon SpA vs. Meli Hotels International
Performance |
| Timeline |
| Amplifon SpA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Meli Hotels International |
Amplifon SpA and Meli Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amplifon SpA and Meli Hotels
The main advantage of trading using opposite Amplifon SpA and Meli Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amplifon SpA 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.| Amplifon SpA vs. Bassett Furniture Industries | Amplifon SpA vs. Hudson Pacific Properties | Amplifon SpA vs. LGI Homes | Amplifon SpA vs. Mesa Air Group |
| Meli Hotels vs. Marriott International | Meli Hotels vs. Hilton Worldwide Holdings | Meli Hotels vs. InterContinental Hotels Group | Meli Hotels vs. Accor SA |
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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