Correlation Between Meli Hotels and DAX Index
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By analyzing existing cross correlation between Meli Hotels International and DAX Index, you can compare the effects of market volatilities on Meli Hotels and DAX Index 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 DAX Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meli Hotels and DAX Index.
Diversification Opportunities for Meli Hotels and DAX Index
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Meli and DAX is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Meli Hotels International and DAX Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DAX Index 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 DAX Index. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DAX Index has no effect on the direction of Meli Hotels i.e., Meli Hotels and DAX Index go up and down completely randomly.
Pair Corralation between Meli Hotels and DAX Index
Assuming the 90 days horizon Meli Hotels is expected to generate 7.35 times less return on investment than DAX Index. In addition to that, Meli Hotels is 2.14 times more volatile than DAX Index. It trades about 0.01 of its total potential returns per unit of risk. DAX Index is currently generating about 0.15 per unit of volatility. If you would invest 1,832,067 in DAX Index on October 25, 2024 and sell it today you would earn a total of 293,360 from holding DAX Index or generate 16.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Meli Hotels International vs. DAX Index
Performance |
| Timeline |
Meli Hotels and DAX Index Volatility Contrast
Predicted Return Density |
| Returns |
Meli Hotels International
Pair trading matchups for Meli Hotels
DAX Index
Pair trading matchups for DAX Index
Pair Trading with Meli Hotels and DAX Index
The main advantage of trading using opposite Meli Hotels and DAX Index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meli Hotels position performs unexpectedly, DAX Index 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 DAX Index will offset losses from the drop in DAX Index's long position.| Meli Hotels vs. Choice Hotels International | Meli Hotels vs. DAIDO METAL TD | Meli Hotels vs. InterContinental Hotels Group | Meli Hotels vs. Fortescue Metals Group |
| DAX Index vs. Retail Estates NV | DAX Index vs. AEON STORES | DAX Index vs. BJs Wholesale Club | DAX Index vs. Nanjing Panda Electronics |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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