Correlation Between Meli Hotels and GPT
Can any of the company-specific risk be diversified away by investing in both Meli Hotels and GPT 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 Meli Hotels and GPT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Meli Hotels International and GPT Group, you can compare the effects of market volatilities on Meli Hotels and GPT 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 Meli Hotels with a short position of GPT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meli Hotels and GPT.
Diversification Opportunities for Meli Hotels and GPT
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Meli and GPT is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Meli Hotels International and GPT Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GPT Group and Meli Hotels 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 Meli Hotels International are associated (or correlated) with GPT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GPT Group has no effect on the direction of Meli Hotels i.e., Meli Hotels and GPT go up and down completely randomly.
Pair Corralation between Meli Hotels and GPT
Assuming the 90 days horizon Meli Hotels International is expected to generate 0.64 times more return on investment than GPT. However, Meli Hotels International is 1.57 times less risky than GPT. It trades about 0.0 of its potential returns per unit of risk. GPT Group is currently generating about -0.02 per unit of risk. If you would invest 720.00 in Meli Hotels International on September 14, 2024 and sell it today you would lose (2.00) from holding Meli Hotels International or give up 0.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Meli Hotels International vs. GPT Group
Performance |
| Timeline |
| Meli Hotels International |
| GPT Group |
Meli Hotels and GPT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meli Hotels and GPT
The main advantage of trading using opposite Meli Hotels and GPT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meli Hotels position performs unexpectedly, GPT 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 GPT will offset losses from the drop in GPT's long position.| Meli Hotels vs. Hyatt Hotels | Meli Hotels vs. InterContinental Hotels Group | Meli Hotels vs. INTERCONT HOTELS | Meli Hotels vs. Wyndham Hotels Resorts |
| GPT vs. MCEWEN MINING INC | GPT vs. PPHE HOTEL GROUP | GPT vs. Pebblebrook Hotel Trust | GPT vs. Meli Hotels International |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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