Correlation Between Melia Hotels and Vivenio Residencial
Can any of the company-specific risk be diversified away by investing in both Melia Hotels and Vivenio Residencial 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 Vivenio Residencial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Melia Hotels and Vivenio Residencial SOCIMI, you can compare the effects of market volatilities on Melia Hotels and Vivenio Residencial 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 Vivenio Residencial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Melia Hotels and Vivenio Residencial.
Diversification Opportunities for Melia Hotels and Vivenio Residencial
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Melia and Vivenio is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Melia Hotels and Vivenio Residencial SOCIMI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vivenio Residencial 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 Vivenio Residencial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vivenio Residencial has no effect on the direction of Melia Hotels i.e., Melia Hotels and Vivenio Residencial go up and down completely randomly.
Pair Corralation between Melia Hotels and Vivenio Residencial
If you would invest 729.00 in Melia Hotels on September 13, 2024 and sell it today you would earn a total of 11.00 from holding Melia Hotels or generate 1.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Melia Hotels vs. Vivenio Residencial SOCIMI
Performance |
| Timeline |
| Melia Hotels |
| Vivenio Residencial |
Melia Hotels and Vivenio Residencial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Melia Hotels and Vivenio Residencial
The main advantage of trading using opposite Melia Hotels and Vivenio Residencial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Melia Hotels position performs unexpectedly, Vivenio Residencial 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 Vivenio Residencial will offset losses from the drop in Vivenio Residencial's long position.| Melia Hotels vs. International Consolidated Airlines | Melia Hotels vs. Aena SA | Melia Hotels vs. Acerinox | Melia Hotels vs. ACS Actividades de |
| Vivenio Residencial vs. Elaia Investment Spain | Vivenio Residencial vs. Arrienda Rental Properties | Vivenio Residencial vs. Technomeca Aerospace SA | Vivenio Residencial vs. Melia Hotels |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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