Correlation Between Hisense Home and MELIA HOTELS
Can any of the company-specific risk be diversified away by investing in both Hisense Home 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 Hisense Home and MELIA HOTELS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hisense Home Appliances and MELIA HOTELS, you can compare the effects of market volatilities on Hisense Home 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 Hisense Home with a short position of MELIA HOTELS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hisense Home and MELIA HOTELS.
Diversification Opportunities for Hisense Home and MELIA HOTELS
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hisense and MELIA is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Hisense Home Appliances and MELIA HOTELS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MELIA HOTELS and Hisense Home 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 Hisense Home Appliances 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 Hisense Home i.e., Hisense Home and MELIA HOTELS go up and down completely randomly.
Pair Corralation between Hisense Home and MELIA HOTELS
Assuming the 90 days horizon Hisense Home Appliances is expected to generate 1.41 times more return on investment than MELIA HOTELS. However, Hisense Home is 1.41 times more volatile than MELIA HOTELS. It trades about 0.09 of its potential returns per unit of risk. MELIA HOTELS is currently generating about -0.01 per unit of risk. If you would invest 301.00 in Hisense Home Appliances on November 30, 2024 and sell it today you would earn a total of 24.00 from holding Hisense Home Appliances or generate 7.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.67% |
| Values | Daily Returns |
Hisense Home Appliances vs. MELIA HOTELS
Performance |
| Timeline |
| Hisense Home Appliances |
| MELIA HOTELS |
Hisense Home and MELIA HOTELS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hisense Home and MELIA HOTELS
The main advantage of trading using opposite Hisense Home and MELIA HOTELS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hisense Home 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.| Hisense Home vs. Laureate Education | Hisense Home vs. Jacquet Metal Service | Hisense Home vs. East Africa Metals | Hisense Home vs. Sportsmans Warehouse Holdings |
| MELIA HOTELS vs. MeVis Medical Solutions | MELIA HOTELS vs. CREO MEDICAL GRP | MELIA HOTELS vs. Diversified Healthcare Trust | MELIA HOTELS vs. ONWARD MEDICAL BV |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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