Correlation Between CANON MARKETING and Meli Hotels
Can any of the company-specific risk be diversified away by investing in both CANON MARKETING 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 CANON MARKETING and Meli Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CANON MARKETING JP and Meli Hotels International, you can compare the effects of market volatilities on CANON MARKETING 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 CANON MARKETING with a short position of Meli Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of CANON MARKETING and Meli Hotels.
Diversification Opportunities for CANON MARKETING and Meli Hotels
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between CANON and Meli is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding CANON MARKETING JP 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 CANON MARKETING 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 CANON MARKETING JP 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 CANON MARKETING i.e., CANON MARKETING and Meli Hotels go up and down completely randomly.
Pair Corralation between CANON MARKETING and Meli Hotels
Assuming the 90 days trading horizon CANON MARKETING JP is expected to generate 0.71 times more return on investment than Meli Hotels. However, CANON MARKETING JP is 1.41 times less risky than Meli Hotels. It trades about 0.44 of its potential returns per unit of risk. Meli Hotels International is currently generating about 0.11 per unit of risk. If you would invest 2,620 in CANON MARKETING JP on August 25, 2024 and sell it today you would earn a total of 300.00 from holding CANON MARKETING JP or generate 11.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CANON MARKETING JP vs. Meli Hotels International
Performance |
| Timeline |
| CANON MARKETING JP |
| Meli Hotels International |
CANON MARKETING and Meli Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CANON MARKETING and Meli Hotels
The main advantage of trading using opposite CANON MARKETING and Meli Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CANON MARKETING 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.| CANON MARKETING vs. PLAYTIKA HOLDING DL 01 | CANON MARKETING vs. JD SPORTS FASH | CANON MARKETING vs. COSTCO WHOLESALE CDR | CANON MARKETING vs. VIAPLAY GROUP AB |
| Meli Hotels vs. CODERE ONLINE LUX | Meli Hotels vs. MUTUIONLINE | Meli Hotels vs. HYATT HOTELS A | Meli Hotels vs. Sunstone Hotel Investors |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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