Correlation Between Melia Hotels and Amper SA
Can any of the company-specific risk be diversified away by investing in both Melia Hotels and Amper SA 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 Melia Hotels and Amper SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Melia Hotels and Amper SA, you can compare the effects of market volatilities on Melia Hotels and Amper SA 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 Melia Hotels with a short position of Amper SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Melia Hotels and Amper SA.
Diversification Opportunities for Melia Hotels and Amper SA
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Melia and Amper is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Melia Hotels and Amper SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amper SA and Melia 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 Melia Hotels are associated (or correlated) with Amper SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amper SA has no effect on the direction of Melia Hotels i.e., Melia Hotels and Amper SA go up and down completely randomly.
Pair Corralation between Melia Hotels and Amper SA
Assuming the 90 days trading horizon Melia Hotels is expected to generate 1.34 times less return on investment than Amper SA. But when comparing it to its historical volatility, Melia Hotels is 2.59 times less risky than Amper SA. It trades about 0.04 of its potential returns per unit of risk. Amper SA is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 11.00 in Amper SA on September 12, 2024 and sell it today you would earn a total of 0.00 from holding Amper SA or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Melia Hotels vs. Amper SA
Performance |
| Timeline |
| Melia Hotels |
| Amper SA |
Melia Hotels and Amper SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Melia Hotels and Amper SA
The main advantage of trading using opposite Melia Hotels and Amper SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Melia Hotels position performs unexpectedly, Amper SA 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 Amper SA will offset losses from the drop in Amper SA's long position.| Melia Hotels vs. International Consolidated Airlines | Melia Hotels vs. Aena SA | Melia Hotels vs. Acerinox | Melia Hotels vs. ACS Actividades de |
| Amper SA vs. Ercros | Amper SA vs. Urbas Grupo Financiero | Amper SA vs. Duro Felguera | Amper SA vs. ENCE Energa y |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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