Correlation Between Cboe UK and Melia Hotels
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By analyzing existing cross correlation between Cboe UK Consumer and Melia Hotels, you can compare the effects of market volatilities on Cboe UK 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 Cboe UK with a short position of Melia Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cboe UK and Melia Hotels.
Diversification Opportunities for Cboe UK and Melia Hotels
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cboe and Melia is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Cboe UK Consumer and Melia Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Melia Hotels and Cboe UK 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 Cboe UK Consumer 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 Cboe UK i.e., Cboe UK and Melia Hotels go up and down completely randomly.
Pair Corralation between Cboe UK and Melia Hotels
Assuming the 90 days trading horizon Cboe UK Consumer is expected to generate 0.62 times more return on investment than Melia Hotels. However, Cboe UK Consumer is 1.63 times less risky than Melia Hotels. It trades about 0.2 of its potential returns per unit of risk. Melia Hotels is currently generating about -0.05 per unit of risk. If you would invest 2,597,547 in Cboe UK Consumer on August 29, 2024 and sell it today you would earn a total of 679,034 from holding Cboe UK Consumer or generate 26.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.22% |
| Values | Daily Returns |
Cboe UK Consumer vs. Melia Hotels
Performance |
| Timeline |
Cboe UK and Melia Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Cboe UK Consumer
Pair trading matchups for Cboe UK
Melia Hotels
Pair trading matchups for Melia Hotels
Pair Trading with Cboe UK and Melia Hotels
The main advantage of trading using opposite Cboe UK and Melia Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cboe UK 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.| Cboe UK vs. Skandinaviska Enskilda Banken | Cboe UK vs. Arrow Electronics | Cboe UK vs. Qurate Retail Series | Cboe UK vs. Alior Bank SA |
| Melia Hotels vs. Samsung Electronics Co | Melia Hotels vs. Samsung Electronics Co | Melia Hotels vs. Hyundai Motor | Melia Hotels vs. Toyota Motor Corp |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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