Correlation Between MELIA HOTELS and QUEEN S
Can any of the company-specific risk be diversified away by investing in both MELIA HOTELS and QUEEN S 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 QUEEN S into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MELIA HOTELS and QUEEN S ROAD, you can compare the effects of market volatilities on MELIA HOTELS and QUEEN S 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 QUEEN S. Check out your portfolio center. Please also check ongoing floating volatility patterns of MELIA HOTELS and QUEEN S.
Diversification Opportunities for MELIA HOTELS and QUEEN S
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MELIA and QUEEN is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding MELIA HOTELS and QUEEN S ROAD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QUEEN S ROAD 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 QUEEN S. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QUEEN S ROAD has no effect on the direction of MELIA HOTELS i.e., MELIA HOTELS and QUEEN S go up and down completely randomly.
Pair Corralation between MELIA HOTELS and QUEEN S
Assuming the 90 days trading horizon MELIA HOTELS is expected to under-perform the QUEEN S. In addition to that, MELIA HOTELS is 3.86 times more volatile than QUEEN S ROAD. It trades about -0.17 of its total potential returns per unit of risk. QUEEN S ROAD is currently generating about 0.58 per unit of volatility. If you would invest 378.00 in QUEEN S ROAD on January 13, 2025 and sell it today you would earn a total of 4.00 from holding QUEEN S ROAD or generate 1.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 13.64% |
| Values | Daily Returns |
MELIA HOTELS vs. QUEEN S ROAD
Performance |
| Timeline |
| MELIA HOTELS |
| QUEEN S ROAD |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
MELIA HOTELS and QUEEN S Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MELIA HOTELS and QUEEN S
The main advantage of trading using opposite MELIA HOTELS and QUEEN S positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MELIA HOTELS position performs unexpectedly, QUEEN S 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 QUEEN S will offset losses from the drop in QUEEN S's long position.| MELIA HOTELS vs. EVS Broadcast Equipment | MELIA HOTELS vs. KENEDIX OFFICE INV | MELIA HOTELS vs. Diversified Healthcare Trust | MELIA HOTELS vs. Fukuyama Transporting Co |
| QUEEN S vs. KINGBOARD CHEMICAL | QUEEN S vs. Mitsubishi Gas Chemical | QUEEN S vs. Mitsui Chemicals | QUEEN S vs. Shin Etsu Chemical Co |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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