Correlation Between Meli Hotels and DOCDATA
Can any of the company-specific risk be diversified away by investing in both Meli Hotels and DOCDATA 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 DOCDATA 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 DOCDATA, you can compare the effects of market volatilities on Meli Hotels and DOCDATA 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 DOCDATA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meli Hotels and DOCDATA.
Diversification Opportunities for Meli Hotels and DOCDATA
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Meli and DOCDATA is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Meli Hotels International and DOCDATA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DOCDATA 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 DOCDATA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DOCDATA has no effect on the direction of Meli Hotels i.e., Meli Hotels and DOCDATA go up and down completely randomly.
Pair Corralation between Meli Hotels and DOCDATA
Assuming the 90 days horizon Meli Hotels International is expected to generate 0.41 times more return on investment than DOCDATA. However, Meli Hotels International is 2.41 times less risky than DOCDATA. It trades about 0.03 of its potential returns per unit of risk. DOCDATA is currently generating about -0.01 per unit of risk. If you would invest 603.00 in Meli Hotels International on September 4, 2024 and sell it today you would earn a total of 70.00 from holding Meli Hotels International or generate 11.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Meli Hotels International vs. DOCDATA
Performance |
| Timeline |
| Meli Hotels International |
| DOCDATA |
Meli Hotels and DOCDATA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meli Hotels and DOCDATA
The main advantage of trading using opposite Meli Hotels and DOCDATA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meli Hotels position performs unexpectedly, DOCDATA 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 DOCDATA will offset losses from the drop in DOCDATA's long position.| Meli Hotels vs. RETAIL FOOD GROUP | Meli Hotels vs. National Retail Properties | Meli Hotels vs. Global Ship Lease | Meli Hotels vs. Transport International Holdings |
| DOCDATA vs. Eagle Materials | DOCDATA vs. INTERCONT HOTELS | DOCDATA vs. Summit Materials | DOCDATA vs. Meli Hotels International |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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