Correlation Between Meli Hotels and DEUTSCHE WOHNEN
Can any of the company-specific risk be diversified away by investing in both Meli Hotels and DEUTSCHE WOHNEN 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 DEUTSCHE WOHNEN 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 DEUTSCHE WOHNEN ADRS12, you can compare the effects of market volatilities on Meli Hotels and DEUTSCHE WOHNEN 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 DEUTSCHE WOHNEN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meli Hotels and DEUTSCHE WOHNEN.
Diversification Opportunities for Meli Hotels and DEUTSCHE WOHNEN
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Meli and DEUTSCHE is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Meli Hotels International and DEUTSCHE WOHNEN ADRS12 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DEUTSCHE WOHNEN ADRS12 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 DEUTSCHE WOHNEN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DEUTSCHE WOHNEN ADRS12 has no effect on the direction of Meli Hotels i.e., Meli Hotels and DEUTSCHE WOHNEN go up and down completely randomly.
Pair Corralation between Meli Hotels and DEUTSCHE WOHNEN
Assuming the 90 days horizon Meli Hotels International is expected to generate 0.72 times more return on investment than DEUTSCHE WOHNEN. However, Meli Hotels International is 1.39 times less risky than DEUTSCHE WOHNEN. It trades about 0.15 of its potential returns per unit of risk. DEUTSCHE WOHNEN ADRS12 is currently generating about 0.0 per unit of risk. If you would invest 669.00 in Meli Hotels International on September 26, 2024 and sell it today you would earn a total of 71.00 from holding Meli Hotels International or generate 10.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Meli Hotels International vs. DEUTSCHE WOHNEN ADRS12
Performance |
| Timeline |
| Meli Hotels International |
| DEUTSCHE WOHNEN ADRS12 |
Meli Hotels and DEUTSCHE WOHNEN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meli Hotels and DEUTSCHE WOHNEN
The main advantage of trading using opposite Meli Hotels and DEUTSCHE WOHNEN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meli Hotels position performs unexpectedly, DEUTSCHE WOHNEN 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 DEUTSCHE WOHNEN will offset losses from the drop in DEUTSCHE WOHNEN's long position.| Meli Hotels vs. Marriott International | Meli Hotels vs. Hilton Worldwide Holdings | Meli Hotels vs. H World Group | Meli Hotels vs. Hyatt Hotels |
| DEUTSCHE WOHNEN vs. Host Hotels Resorts | DEUTSCHE WOHNEN vs. Aegean Airlines SA | DEUTSCHE WOHNEN vs. Sunstone Hotel Investors | DEUTSCHE WOHNEN 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 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.
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