Correlation Between MELIA HOTELS and OFFICE DEPOT
Can any of the company-specific risk be diversified away by investing in both MELIA HOTELS and OFFICE DEPOT 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 OFFICE DEPOT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MELIA HOTELS and OFFICE DEPOT, you can compare the effects of market volatilities on MELIA HOTELS and OFFICE DEPOT 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 OFFICE DEPOT. Check out your portfolio center. Please also check ongoing floating volatility patterns of MELIA HOTELS and OFFICE DEPOT.
Diversification Opportunities for MELIA HOTELS and OFFICE DEPOT
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between MELIA and OFFICE is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding MELIA HOTELS and OFFICE DEPOT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OFFICE DEPOT 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 OFFICE DEPOT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OFFICE DEPOT has no effect on the direction of MELIA HOTELS i.e., MELIA HOTELS and OFFICE DEPOT go up and down completely randomly.
Pair Corralation between MELIA HOTELS and OFFICE DEPOT
If you would invest 695.00 in MELIA HOTELS on November 27, 2024 and sell it today you would earn a total of 14.00 from holding MELIA HOTELS or generate 2.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MELIA HOTELS vs. OFFICE DEPOT
Performance |
| Timeline |
| MELIA HOTELS |
| OFFICE DEPOT |
MELIA HOTELS and OFFICE DEPOT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MELIA HOTELS and OFFICE DEPOT
The main advantage of trading using opposite MELIA HOTELS and OFFICE DEPOT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MELIA HOTELS position performs unexpectedly, OFFICE DEPOT 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 OFFICE DEPOT will offset losses from the drop in OFFICE DEPOT's long position.| MELIA HOTELS vs. De Grey Mining | MELIA HOTELS vs. Stag Industrial | MELIA HOTELS vs. Easy Software AG | MELIA HOTELS vs. X FAB Silicon Foundries |
| OFFICE DEPOT vs. Enter Air SA | OFFICE DEPOT vs. SmarTone Telecommunications Holdings | OFFICE DEPOT vs. Iridium Communications | OFFICE DEPOT vs. MYFAIR GOLD P |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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