Correlation Between MELIA HOTELS and ALLIANZ SE
Can any of the company-specific risk be diversified away by investing in both MELIA HOTELS and ALLIANZ SE 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 ALLIANZ SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MELIA HOTELS and ALLIANZ SE UNSPADR, you can compare the effects of market volatilities on MELIA HOTELS and ALLIANZ SE 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 ALLIANZ SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of MELIA HOTELS and ALLIANZ SE.
Diversification Opportunities for MELIA HOTELS and ALLIANZ SE
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between MELIA and ALLIANZ is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding MELIA HOTELS and ALLIANZ SE UNSPADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALLIANZ SE UNSPADR 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 ALLIANZ SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALLIANZ SE UNSPADR has no effect on the direction of MELIA HOTELS i.e., MELIA HOTELS and ALLIANZ SE go up and down completely randomly.
Pair Corralation between MELIA HOTELS and ALLIANZ SE
Assuming the 90 days trading horizon MELIA HOTELS is expected to generate 2.4 times more return on investment than ALLIANZ SE. However, MELIA HOTELS is 2.4 times more volatile than ALLIANZ SE UNSPADR. It trades about 0.06 of its potential returns per unit of risk. ALLIANZ SE UNSPADR is currently generating about 0.0 per unit of risk. If you would invest 672.00 in MELIA HOTELS on September 1, 2024 and sell it today you would earn a total of 14.00 from holding MELIA HOTELS or generate 2.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MELIA HOTELS vs. ALLIANZ SE UNSPADR
Performance |
| Timeline |
| MELIA HOTELS |
| ALLIANZ SE UNSPADR |
MELIA HOTELS and ALLIANZ SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MELIA HOTELS and ALLIANZ SE
The main advantage of trading using opposite MELIA HOTELS and ALLIANZ SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MELIA HOTELS position performs unexpectedly, ALLIANZ SE 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 ALLIANZ SE will offset losses from the drop in ALLIANZ SE's long position.| MELIA HOTELS vs. SIVERS SEMICONDUCTORS AB | MELIA HOTELS vs. Darden Restaurants | MELIA HOTELS vs. Reliance Steel Aluminum | MELIA HOTELS vs. Q2M Managementberatung AG |
| ALLIANZ SE vs. MELIA HOTELS | ALLIANZ SE vs. Hyatt Hotels | ALLIANZ SE vs. MHP Hotel AG | ALLIANZ SE vs. INTERCONT 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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