Correlation Between Meliá Hotels and DALATA HOTEL
Can any of the company-specific risk be diversified away by investing in both Meliá Hotels and DALATA HOTEL 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 Meliá Hotels and DALATA HOTEL 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 DALATA HOTEL, you can compare the effects of market volatilities on Meliá Hotels and DALATA HOTEL 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 Meliá Hotels with a short position of DALATA HOTEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meliá Hotels and DALATA HOTEL.
Diversification Opportunities for Meliá Hotels and DALATA HOTEL
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Meliá and DALATA is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Meli Hotels International and DALATA HOTEL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DALATA HOTEL and Meliá 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 DALATA HOTEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DALATA HOTEL has no effect on the direction of Meliá Hotels i.e., Meliá Hotels and DALATA HOTEL go up and down completely randomly.
Pair Corralation between Meliá Hotels and DALATA HOTEL
Assuming the 90 days horizon Meli Hotels International is expected to generate 1.04 times more return on investment than DALATA HOTEL. However, Meliá Hotels is 1.04 times more volatile than DALATA HOTEL. It trades about 0.09 of its potential returns per unit of risk. DALATA HOTEL is currently generating about 0.04 per unit of risk. If you would invest 698.00 in Meli Hotels International on October 11, 2024 and sell it today you would earn a total of 19.00 from holding Meli Hotels International or generate 2.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.44% |
| Values | Daily Returns |
Meli Hotels International vs. DALATA HOTEL
Performance |
| Timeline |
| Meli Hotels International |
| DALATA HOTEL |
Meliá Hotels and DALATA HOTEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meliá Hotels and DALATA HOTEL
The main advantage of trading using opposite Meliá Hotels and DALATA HOTEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meliá Hotels position performs unexpectedly, DALATA HOTEL 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 DALATA HOTEL will offset losses from the drop in DALATA HOTEL's long position.| Meliá Hotels vs. EIDESVIK OFFSHORE NK | Meliá Hotels vs. Charter Communications | Meliá Hotels vs. Singapore Telecommunications Limited | Meliá Hotels vs. BW OFFSHORE LTD |
| DALATA HOTEL vs. PennantPark Investment | DALATA HOTEL vs. SLR Investment Corp | DALATA HOTEL vs. Guangdong Investment Limited | DALATA HOTEL vs. Commercial Vehicle Group |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |