Correlation Between Meli Hotels and PNC Financial
Can any of the company-specific risk be diversified away by investing in both Meli Hotels and PNC Financial 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 PNC Financial 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 PNC Financial Services, you can compare the effects of market volatilities on Meli Hotels and PNC Financial 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 PNC Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meli Hotels and PNC Financial.
Diversification Opportunities for Meli Hotels and PNC Financial
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Meli and PNC is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Meli Hotels International and PNC Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PNC Financial Services 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 PNC Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PNC Financial Services has no effect on the direction of Meli Hotels i.e., Meli Hotels and PNC Financial go up and down completely randomly.
Pair Corralation between Meli Hotels and PNC Financial
Assuming the 90 days horizon Meli Hotels International is expected to under-perform the PNC Financial. But the stock apears to be less risky and, when comparing its historical volatility, Meli Hotels International is 1.31 times less risky than PNC Financial. The stock trades about -0.11 of its potential returns per unit of risk. The PNC Financial Services is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 18,443 in PNC Financial Services on October 28, 2024 and sell it today you would earn a total of 557.00 from holding PNC Financial Services or generate 3.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Meli Hotels International vs. PNC Financial Services
Performance |
| Timeline |
| Meli Hotels International |
| PNC Financial Services |
Meli Hotels and PNC Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meli Hotels and PNC Financial
The main advantage of trading using opposite Meli Hotels and PNC Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meli Hotels position performs unexpectedly, PNC Financial 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 PNC Financial will offset losses from the drop in PNC Financial's long position.| Meli Hotels vs. DATADOT TECHNOLOGY | Meli Hotels vs. GMO Internet | Meli Hotels vs. Datadog | Meli Hotels vs. NTT DATA |
| PNC Financial vs. Pebblebrook Hotel Trust | PNC Financial vs. SEI INVESTMENTS | PNC Financial vs. CHRYSALIS INVESTMENTS LTD | PNC Financial vs. SLR Investment Corp |
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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