Correlation Between MELIA HOTELS and VIAPLAY GROUP
Can any of the company-specific risk be diversified away by investing in both MELIA HOTELS and VIAPLAY GROUP 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 VIAPLAY GROUP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MELIA HOTELS and VIAPLAY GROUP AB, you can compare the effects of market volatilities on MELIA HOTELS and VIAPLAY GROUP 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 VIAPLAY GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of MELIA HOTELS and VIAPLAY GROUP.
Diversification Opportunities for MELIA HOTELS and VIAPLAY GROUP
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between MELIA and VIAPLAY is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding MELIA HOTELS and VIAPLAY GROUP AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VIAPLAY GROUP AB 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 VIAPLAY GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VIAPLAY GROUP AB has no effect on the direction of MELIA HOTELS i.e., MELIA HOTELS and VIAPLAY GROUP go up and down completely randomly.
Pair Corralation between MELIA HOTELS and VIAPLAY GROUP
Assuming the 90 days trading horizon MELIA HOTELS is expected to generate 0.28 times more return on investment than VIAPLAY GROUP. However, MELIA HOTELS is 3.53 times less risky than VIAPLAY GROUP. It trades about 0.07 of its potential returns per unit of risk. VIAPLAY GROUP AB is currently generating about -0.07 per unit of risk. If you would invest 669.00 in MELIA HOTELS on August 29, 2024 and sell it today you would earn a total of 23.00 from holding MELIA HOTELS or generate 3.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 97.67% |
| Values | Daily Returns |
MELIA HOTELS vs. VIAPLAY GROUP AB
Performance |
| Timeline |
| MELIA HOTELS |
| VIAPLAY GROUP AB |
MELIA HOTELS and VIAPLAY GROUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MELIA HOTELS and VIAPLAY GROUP
The main advantage of trading using opposite MELIA HOTELS and VIAPLAY GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MELIA HOTELS position performs unexpectedly, VIAPLAY GROUP 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 VIAPLAY GROUP will offset losses from the drop in VIAPLAY GROUP's long position.| MELIA HOTELS vs. Apple Inc | MELIA HOTELS vs. Apple Inc | MELIA HOTELS vs. Superior Plus Corp | MELIA HOTELS vs. SIVERS SEMICONDUCTORS AB |
| VIAPLAY GROUP vs. ATOSS SOFTWARE | VIAPLAY GROUP vs. VITEC SOFTWARE GROUP | VIAPLAY GROUP vs. Choice Hotels International | VIAPLAY GROUP 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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