Correlation Between Meli Hotels and Microbot Medical
Can any of the company-specific risk be diversified away by investing in both Meli Hotels and Microbot Medical 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 Microbot Medical 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 Microbot Medical, you can compare the effects of market volatilities on Meli Hotels and Microbot Medical 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 Microbot Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meli Hotels and Microbot Medical.
Diversification Opportunities for Meli Hotels and Microbot Medical
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Meli and Microbot is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Meli Hotels International and Microbot Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microbot Medical 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 Microbot Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Microbot Medical has no effect on the direction of Meli Hotels i.e., Meli Hotels and Microbot Medical go up and down completely randomly.
Pair Corralation between Meli Hotels and Microbot Medical
Assuming the 90 days horizon Meli Hotels is expected to generate 2.24 times less return on investment than Microbot Medical. But when comparing it to its historical volatility, Meli Hotels International is 1.81 times less risky than Microbot Medical. It trades about 0.1 of its potential returns per unit of risk. Microbot Medical is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 87.00 in Microbot Medical on August 30, 2024 and sell it today you would earn a total of 6.00 from holding Microbot Medical or generate 6.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Meli Hotels International vs. Microbot Medical
Performance |
| Timeline |
| Meli Hotels International |
| Microbot Medical |
Meli Hotels and Microbot Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meli Hotels and Microbot Medical
The main advantage of trading using opposite Meli Hotels and Microbot Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meli Hotels position performs unexpectedly, Microbot Medical 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 Microbot Medical will offset losses from the drop in Microbot Medical's long position.| Meli Hotels vs. InterContinental Hotels Group | Meli Hotels vs. ACCOR SPADR NEW | Meli Hotels vs. Choice Hotels International |
| Microbot Medical vs. Apple Inc | Microbot Medical vs. Apple Inc | Microbot Medical vs. Apple Inc | Microbot Medical 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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