Correlation Between Meli Hotels and CENTURIA OFFICE
Can any of the company-specific risk be diversified away by investing in both Meli Hotels and CENTURIA OFFICE 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 CENTURIA OFFICE 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 CENTURIA OFFICE REIT, you can compare the effects of market volatilities on Meli Hotels and CENTURIA OFFICE 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 CENTURIA OFFICE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meli Hotels and CENTURIA OFFICE.
Diversification Opportunities for Meli Hotels and CENTURIA OFFICE
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Meli and CENTURIA is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Meli Hotels International and CENTURIA OFFICE REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CENTURIA OFFICE REIT 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 CENTURIA OFFICE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CENTURIA OFFICE REIT has no effect on the direction of Meli Hotels i.e., Meli Hotels and CENTURIA OFFICE go up and down completely randomly.
Pair Corralation between Meli Hotels and CENTURIA OFFICE
Assuming the 90 days horizon Meli Hotels International is expected to generate 1.08 times more return on investment than CENTURIA OFFICE. However, Meli Hotels is 1.08 times more volatile than CENTURIA OFFICE REIT. It trades about 0.04 of its potential returns per unit of risk. CENTURIA OFFICE REIT is currently generating about 0.01 per unit of risk. If you would invest 500.00 in Meli Hotels International on September 2, 2024 and sell it today you would earn a total of 171.00 from holding Meli Hotels International or generate 34.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Meli Hotels International vs. CENTURIA OFFICE REIT
Performance |
| Timeline |
| Meli Hotels International |
| CENTURIA OFFICE REIT |
Meli Hotels and CENTURIA OFFICE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meli Hotels and CENTURIA OFFICE
The main advantage of trading using opposite Meli Hotels and CENTURIA OFFICE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meli Hotels position performs unexpectedly, CENTURIA OFFICE 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 CENTURIA OFFICE will offset losses from the drop in CENTURIA OFFICE's long position.| Meli Hotels vs. Chuangs China Investments | Meli Hotels vs. MIRAMAR HOTEL INV | Meli Hotels vs. MHP Hotel AG | Meli Hotels vs. CapitaLand Investment Limited |
| CENTURIA OFFICE vs. Apple Inc | CENTURIA OFFICE vs. Apple Inc | CENTURIA OFFICE vs. Apple Inc | CENTURIA OFFICE vs. Apple Inc |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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