Correlation Between Compania Espanola and Melia Hotels
Can any of the company-specific risk be diversified away by investing in both Compania Espanola 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 Compania Espanola and Melia Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Compania Espanola de and Melia Hotels, you can compare the effects of market volatilities on Compania Espanola 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 Compania Espanola with a short position of Melia Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compania Espanola and Melia Hotels.
Diversification Opportunities for Compania Espanola and Melia Hotels
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Compania and Melia is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Compania Espanola de and Melia Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Melia Hotels and Compania Espanola 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 Compania Espanola de 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 Compania Espanola i.e., Compania Espanola and Melia Hotels go up and down completely randomly.
Pair Corralation between Compania Espanola and Melia Hotels
Assuming the 90 days trading horizon Compania Espanola de is expected to under-perform the Melia Hotels. In addition to that, Compania Espanola is 1.47 times more volatile than Melia Hotels. It trades about -0.24 of its total potential returns per unit of risk. Melia Hotels is currently generating about -0.21 per unit of volatility. If you would invest 737.00 in Melia Hotels on October 24, 2024 and sell it today you would lose (40.00) from holding Melia Hotels or give up 5.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compania Espanola de vs. Melia Hotels
Performance |
| Timeline |
| Compania Espanola |
| Melia Hotels |
Compania Espanola and Melia Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compania Espanola and Melia Hotels
The main advantage of trading using opposite Compania Espanola and Melia Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compania Espanola 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.| Compania Espanola vs. All Iron Re | Compania Espanola vs. Vytrus Biotech SA | Compania Espanola vs. Melia Hotels | Compania Espanola vs. Millenium Hotels Real |
| Melia Hotels vs. International Consolidated Airlines | Melia Hotels vs. Merlin Properties SOCIMI | Melia Hotels vs. Aena SA | Melia Hotels vs. Acerinox |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |