Correlation Between MELIA HOTELS and HAPAG LLOYD
Can any of the company-specific risk be diversified away by investing in both MELIA HOTELS and HAPAG LLOYD 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 HAPAG LLOYD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MELIA HOTELS and HAPAG LLOYD UNSPADR 12, you can compare the effects of market volatilities on MELIA HOTELS and HAPAG LLOYD 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 HAPAG LLOYD. Check out your portfolio center. Please also check ongoing floating volatility patterns of MELIA HOTELS and HAPAG LLOYD.
Diversification Opportunities for MELIA HOTELS and HAPAG LLOYD
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between MELIA and HAPAG is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding MELIA HOTELS and HAPAG LLOYD UNSPADR 12 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HAPAG LLOYD 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 HAPAG LLOYD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HAPAG LLOYD UNSPADR has no effect on the direction of MELIA HOTELS i.e., MELIA HOTELS and HAPAG LLOYD go up and down completely randomly.
Pair Corralation between MELIA HOTELS and HAPAG LLOYD
Assuming the 90 days trading horizon MELIA HOTELS is expected to generate 0.63 times more return on investment than HAPAG LLOYD. However, MELIA HOTELS is 1.59 times less risky than HAPAG LLOYD. It trades about -0.17 of its potential returns per unit of risk. HAPAG LLOYD UNSPADR 12 is currently generating about -0.33 per unit of risk. If you would invest 731.00 in MELIA HOTELS on October 25, 2024 and sell it today you would lose (37.00) from holding MELIA HOTELS or give up 5.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MELIA HOTELS vs. HAPAG LLOYD UNSPADR 12
Performance |
| Timeline |
| MELIA HOTELS |
| HAPAG LLOYD UNSPADR |
MELIA HOTELS and HAPAG LLOYD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MELIA HOTELS and HAPAG LLOYD
The main advantage of trading using opposite MELIA HOTELS and HAPAG LLOYD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MELIA HOTELS position performs unexpectedly, HAPAG LLOYD 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 HAPAG LLOYD will offset losses from the drop in HAPAG LLOYD's long position.| MELIA HOTELS vs. Apple Inc | MELIA HOTELS vs. Apple Inc | MELIA HOTELS vs. Apple Inc | MELIA HOTELS vs. Apple Inc |
| HAPAG LLOYD vs. NTT DATA | HAPAG LLOYD vs. DATATEC LTD 2 | HAPAG LLOYD vs. INFORMATION SVC GRP | HAPAG LLOYD vs. Linedata Services 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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