Correlation Between CN YANGTPWR and Meli Hotels
Can any of the company-specific risk be diversified away by investing in both CN YANGTPWR 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 CN YANGTPWR and Meli Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CN YANGTPWR GDR and Meli Hotels International, you can compare the effects of market volatilities on CN YANGTPWR 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 CN YANGTPWR with a short position of Meli Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of CN YANGTPWR and Meli Hotels.
Diversification Opportunities for CN YANGTPWR and Meli Hotels
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CYZB and Meli is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding CN YANGTPWR GDR 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 CN YANGTPWR 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 CN YANGTPWR GDR 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 CN YANGTPWR i.e., CN YANGTPWR and Meli Hotels go up and down completely randomly.
Pair Corralation between CN YANGTPWR and Meli Hotels
Assuming the 90 days trading horizon CN YANGTPWR GDR is expected to generate 1.24 times more return on investment than Meli Hotels. However, CN YANGTPWR is 1.24 times more volatile than Meli Hotels International. It trades about 0.04 of its potential returns per unit of risk. Meli Hotels International is currently generating about 0.02 per unit of risk. If you would invest 2,590 in CN YANGTPWR GDR on September 1, 2024 and sell it today you would earn a total of 730.00 from holding CN YANGTPWR GDR or generate 28.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.78% |
| Values | Daily Returns |
CN YANGTPWR GDR vs. Meli Hotels International
Performance |
| Timeline |
| CN YANGTPWR GDR |
| Meli Hotels International |
CN YANGTPWR and Meli Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CN YANGTPWR and Meli Hotels
The main advantage of trading using opposite CN YANGTPWR and Meli Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CN YANGTPWR 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.| CN YANGTPWR vs. Pick n Pay | CN YANGTPWR vs. Clean Energy Fuels | CN YANGTPWR vs. TFS FINANCIAL | CN YANGTPWR vs. QURATE RETAIL INC |
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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