Correlation Between Melia Hotels and Prosegur Cash
Can any of the company-specific risk be diversified away by investing in both Melia Hotels and Prosegur Cash 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 Prosegur Cash into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Melia Hotels and Prosegur Cash SA, you can compare the effects of market volatilities on Melia Hotels and Prosegur Cash 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 Prosegur Cash. Check out your portfolio center. Please also check ongoing floating volatility patterns of Melia Hotels and Prosegur Cash.
Diversification Opportunities for Melia Hotels and Prosegur Cash
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Melia and Prosegur is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Melia Hotels and Prosegur Cash SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prosegur Cash 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 Prosegur Cash. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prosegur Cash SA has no effect on the direction of Melia Hotels i.e., Melia Hotels and Prosegur Cash go up and down completely randomly.
Pair Corralation between Melia Hotels and Prosegur Cash
Assuming the 90 days trading horizon Melia Hotels is expected to generate 0.81 times more return on investment than Prosegur Cash. However, Melia Hotels is 1.23 times less risky than Prosegur Cash. It trades about 0.04 of its potential returns per unit of risk. Prosegur Cash SA is currently generating about -0.15 per unit of risk. If you would invest 667.00 in Melia Hotels on August 30, 2024 and sell it today you would earn a total of 7.00 from holding Melia Hotels or generate 1.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Melia Hotels vs. Prosegur Cash SA
Performance |
| Timeline |
| Melia Hotels |
| Prosegur Cash SA |
Melia Hotels and Prosegur Cash Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Melia Hotels and Prosegur Cash
The main advantage of trading using opposite Melia Hotels and Prosegur Cash positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Melia Hotels position performs unexpectedly, Prosegur Cash 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 Prosegur Cash will offset losses from the drop in Prosegur Cash's long position.| Melia Hotels vs. Biotechnology Assets SA | Melia Hotels vs. Aedas Homes SL | Melia Hotels vs. Arrienda Rental Properties | Melia Hotels vs. Elaia Investment Spain |
| Prosegur Cash vs. Inhome Prime Properties | Prosegur Cash vs. International Consolidated Airlines | Prosegur Cash vs. Aedas Homes SL | Prosegur Cash vs. Parlem Telecom Companyia |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |