Correlation Between MELIA HOTELS and MSCI WORLD
Can any of the company-specific risk be diversified away by investing in both MELIA HOTELS and MSCI WORLD 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 MSCI WORLD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MELIA HOTELS and MSCI WORLD CLIMATE, you can compare the effects of market volatilities on MELIA HOTELS and MSCI WORLD 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 MSCI WORLD. Check out your portfolio center. Please also check ongoing floating volatility patterns of MELIA HOTELS and MSCI WORLD.
Diversification Opportunities for MELIA HOTELS and MSCI WORLD
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MELIA and MSCI is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding MELIA HOTELS and MSCI WORLD CLIMATE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MSCI WORLD CLIMATE 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 MSCI WORLD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MSCI WORLD CLIMATE has no effect on the direction of MELIA HOTELS i.e., MELIA HOTELS and MSCI WORLD go up and down completely randomly.
Pair Corralation between MELIA HOTELS and MSCI WORLD
Assuming the 90 days trading horizon MELIA HOTELS is expected to under-perform the MSCI WORLD. But the stock apears to be less risky and, when comparing its historical volatility, MELIA HOTELS is 2.77 times less risky than MSCI WORLD. The stock trades about 0.0 of its potential returns per unit of risk. The MSCI WORLD CLIMATE is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 6,250 in MSCI WORLD CLIMATE on September 4, 2024 and sell it today you would earn a total of 1,700 from holding MSCI WORLD CLIMATE or generate 27.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
MELIA HOTELS vs. MSCI WORLD CLIMATE
Performance |
| Timeline |
| MELIA HOTELS |
| MSCI WORLD CLIMATE |
MELIA HOTELS and MSCI WORLD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MELIA HOTELS and MSCI WORLD
The main advantage of trading using opposite MELIA HOTELS and MSCI WORLD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MELIA HOTELS position performs unexpectedly, MSCI WORLD 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 MSCI WORLD will offset losses from the drop in MSCI WORLD's long position.| MELIA HOTELS vs. LANDSEA HOMES P | MELIA HOTELS vs. VITEC SOFTWARE GROUP | MELIA HOTELS vs. Sqs Software Quality | MELIA HOTELS vs. Neinor Homes SA |
| MSCI WORLD vs. MELIA HOTELS | MSCI WORLD vs. FRACTAL GAMING GROUP | MSCI WORLD vs. MHP Hotel AG | MSCI WORLD vs. Wyndham Hotels Resorts |
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 Stocks Directory module to find actively traded stocks across global markets.
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