Correlation Between COMBA TELECOM and MELIA HOTELS
Can any of the company-specific risk be diversified away by investing in both COMBA TELECOM 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 COMBA TELECOM and MELIA HOTELS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COMBA TELECOM SYST and MELIA HOTELS, you can compare the effects of market volatilities on COMBA TELECOM 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 COMBA TELECOM with a short position of MELIA HOTELS. Check out your portfolio center. Please also check ongoing floating volatility patterns of COMBA TELECOM and MELIA HOTELS.
Diversification Opportunities for COMBA TELECOM and MELIA HOTELS
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between COMBA and MELIA is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding COMBA TELECOM SYST and MELIA HOTELS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MELIA HOTELS and COMBA TELECOM 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 COMBA TELECOM SYST 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 COMBA TELECOM i.e., COMBA TELECOM and MELIA HOTELS go up and down completely randomly.
Pair Corralation between COMBA TELECOM and MELIA HOTELS
Assuming the 90 days trading horizon COMBA TELECOM SYST is expected to under-perform the MELIA HOTELS. In addition to that, COMBA TELECOM is 1.21 times more volatile than MELIA HOTELS. It trades about -0.33 of its total potential returns per unit of risk. MELIA HOTELS is currently generating about -0.12 per unit of volatility. If you would invest 726.00 in MELIA HOTELS on October 29, 2024 and sell it today you would lose (32.00) from holding MELIA HOTELS or give up 4.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
COMBA TELECOM SYST vs. MELIA HOTELS
Performance |
| Timeline |
| COMBA TELECOM SYST |
| MELIA HOTELS |
COMBA TELECOM and MELIA HOTELS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COMBA TELECOM and MELIA HOTELS
The main advantage of trading using opposite COMBA TELECOM and MELIA HOTELS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COMBA TELECOM 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's long position.| COMBA TELECOM vs. GOODYEAR T RUBBER | COMBA TELECOM vs. NTT DATA | COMBA TELECOM vs. EAGLE MATERIALS | COMBA TELECOM vs. Information Services International Dentsu |
| MELIA HOTELS vs. GALENA MINING LTD | MELIA HOTELS vs. PLAYWAY SA ZY 10 | MELIA HOTELS vs. Calibre Mining Corp | MELIA HOTELS vs. Jacquet Metal Service |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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