Correlation Between Melia Hotels and IBEX Total
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By analyzing existing cross correlation between Melia Hotels and IBEX Total Return, you can compare the effects of market volatilities on Melia Hotels and IBEX Total 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 IBEX Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of Melia Hotels and IBEX Total.
Diversification Opportunities for Melia Hotels and IBEX Total
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Melia and IBEX is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Melia Hotels and IBEX Total Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IBEX Total Return 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 IBEX Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IBEX Total Return has no effect on the direction of Melia Hotels i.e., Melia Hotels and IBEX Total go up and down completely randomly.
Pair Corralation between Melia Hotels and IBEX Total
Assuming the 90 days trading horizon Melia Hotels is expected to generate 3.37 times less return on investment than IBEX Total. In addition to that, Melia Hotels is 1.93 times more volatile than IBEX Total Return. It trades about 0.01 of its total potential returns per unit of risk. IBEX Total Return is currently generating about 0.08 per unit of volatility. If you would invest 3,831,530 in IBEX Total Return on October 25, 2024 and sell it today you would earn a total of 334,130 from holding IBEX Total Return or generate 8.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Melia Hotels vs. IBEX Total Return
Performance |
| Timeline |
Melia Hotels and IBEX Total Volatility Contrast
Predicted Return Density |
| Returns |
Melia Hotels
Pair trading matchups for Melia Hotels
IBEX Total Return
Pair trading matchups for IBEX Total
Pair Trading with Melia Hotels and IBEX Total
The main advantage of trading using opposite Melia Hotels and IBEX Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Melia Hotels position performs unexpectedly, IBEX Total 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 IBEX Total will offset losses from the drop in IBEX Total's long position.| Melia Hotels vs. International Consolidated Airlines | Melia Hotels vs. Merlin Properties SOCIMI | Melia Hotels vs. Aena SA | Melia Hotels vs. Acerinox |
| IBEX Total vs. Home Capital Rentals | IBEX Total vs. International Consolidated Airlines | IBEX Total vs. Atrys Health SL | IBEX Total vs. Tier1 Technology SA |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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