Correlation Between Meli Hotels and Caseys General
Can any of the company-specific risk be diversified away by investing in both Meli Hotels and Caseys General 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 Caseys General 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 Caseys General Stores, you can compare the effects of market volatilities on Meli Hotels and Caseys General 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 Caseys General. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meli Hotels and Caseys General.
Diversification Opportunities for Meli Hotels and Caseys General
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Meli and Caseys is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Meli Hotels International and Caseys General Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caseys General Stores 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 Caseys General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caseys General Stores has no effect on the direction of Meli Hotels i.e., Meli Hotels and Caseys General go up and down completely randomly.
Pair Corralation between Meli Hotels and Caseys General
Assuming the 90 days horizon Meli Hotels is expected to generate 1.28 times less return on investment than Caseys General. In addition to that, Meli Hotels is 1.09 times more volatile than Caseys General Stores. It trades about 0.06 of its total potential returns per unit of risk. Caseys General Stores is currently generating about 0.08 per unit of volatility. If you would invest 21,711 in Caseys General Stores on September 14, 2024 and sell it today you would earn a total of 18,689 from holding Caseys General Stores or generate 86.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Meli Hotels International vs. Caseys General Stores
Performance |
| Timeline |
| Meli Hotels International |
| Caseys General Stores |
Meli Hotels and Caseys General Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meli Hotels and Caseys General
The main advantage of trading using opposite Meli Hotels and Caseys General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meli Hotels position performs unexpectedly, Caseys General 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 Caseys General will offset losses from the drop in Caseys General'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 |
| Caseys General vs. Apple Inc | Caseys General vs. Apple Inc | Caseys General vs. Apple Inc | Caseys General 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Commodity Directory Find actively traded commodities issued by global exchanges |