Correlation Between Meli Hotels and ANTA SPORTS
Can any of the company-specific risk be diversified away by investing in both Meli Hotels and ANTA SPORTS 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 ANTA SPORTS 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 ANTA SPORTS PRODUCT, you can compare the effects of market volatilities on Meli Hotels and ANTA SPORTS 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 ANTA SPORTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meli Hotels and ANTA SPORTS.
Diversification Opportunities for Meli Hotels and ANTA SPORTS
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Meli and ANTA is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Meli Hotels International and ANTA SPORTS PRODUCT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANTA SPORTS PRODUCT 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 ANTA SPORTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANTA SPORTS PRODUCT has no effect on the direction of Meli Hotels i.e., Meli Hotels and ANTA SPORTS go up and down completely randomly.
Pair Corralation between Meli Hotels and ANTA SPORTS
Assuming the 90 days horizon Meli Hotels is expected to generate 2.67 times less return on investment than ANTA SPORTS. But when comparing it to its historical volatility, Meli Hotels International is 1.84 times less risky than ANTA SPORTS. It trades about 0.04 of its potential returns per unit of risk. ANTA SPORTS PRODUCT is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 646.00 in ANTA SPORTS PRODUCT on September 12, 2024 and sell it today you would earn a total of 354.00 from holding ANTA SPORTS PRODUCT or generate 54.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Meli Hotels International vs. ANTA SPORTS PRODUCT
Performance |
| Timeline |
| Meli Hotels International |
| ANTA SPORTS PRODUCT |
Meli Hotels and ANTA SPORTS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meli Hotels and ANTA SPORTS
The main advantage of trading using opposite Meli Hotels and ANTA SPORTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meli Hotels position performs unexpectedly, ANTA SPORTS 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 ANTA SPORTS will offset losses from the drop in ANTA SPORTS'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 |
| ANTA SPORTS vs. Entravision Communications | ANTA SPORTS vs. Postal Savings Bank | ANTA SPORTS vs. HEMISPHERE EGY | ANTA SPORTS vs. Computershare Limited |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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