Correlation Between Bankers Investment and Melia Hotels
Can any of the company-specific risk be diversified away by investing in both Bankers Investment 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 Bankers Investment and Melia Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bankers Investment Trust and Melia Hotels, you can compare the effects of market volatilities on Bankers Investment 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 Bankers Investment with a short position of Melia Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bankers Investment and Melia Hotels.
Diversification Opportunities for Bankers Investment and Melia Hotels
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bankers and Melia is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Bankers Investment Trust and Melia Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Melia Hotels and Bankers Investment 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 Bankers Investment Trust 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 Bankers Investment i.e., Bankers Investment and Melia Hotels go up and down completely randomly.
Pair Corralation between Bankers Investment and Melia Hotels
Assuming the 90 days trading horizon Bankers Investment Trust is expected to generate 0.82 times more return on investment than Melia Hotels. However, Bankers Investment Trust is 1.22 times less risky than Melia Hotels. It trades about 0.29 of its potential returns per unit of risk. Melia Hotels is currently generating about -0.17 per unit of risk. If you would invest 11,398 in Bankers Investment Trust on October 30, 2024 and sell it today you would earn a total of 682.00 from holding Bankers Investment Trust or generate 5.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bankers Investment Trust vs. Melia Hotels
Performance |
| Timeline |
| Bankers Investment Trust |
| Melia Hotels |
Bankers Investment and Melia Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bankers Investment and Melia Hotels
The main advantage of trading using opposite Bankers Investment and Melia Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bankers Investment 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' long position.| Bankers Investment vs. BW Offshore | Bankers Investment vs. Bisichi Mining PLC | Bankers Investment vs. Silver Bullet Data | Bankers Investment vs. Symphony Environmental Technologies |
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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