Correlation Between MELIA HOTELS and Samsung SDI
Can any of the company-specific risk be diversified away by investing in both MELIA HOTELS and Samsung SDI 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 Samsung SDI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MELIA HOTELS and Samsung SDI Co, you can compare the effects of market volatilities on MELIA HOTELS and Samsung SDI 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 Samsung SDI. Check out your portfolio center. Please also check ongoing floating volatility patterns of MELIA HOTELS and Samsung SDI.
Diversification Opportunities for MELIA HOTELS and Samsung SDI
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between MELIA and Samsung is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding MELIA HOTELS and Samsung SDI Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung SDI 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 Samsung SDI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung SDI has no effect on the direction of MELIA HOTELS i.e., MELIA HOTELS and Samsung SDI go up and down completely randomly.
Pair Corralation between MELIA HOTELS and Samsung SDI
Assuming the 90 days trading horizon MELIA HOTELS is expected to generate 0.7 times more return on investment than Samsung SDI. However, MELIA HOTELS is 1.43 times less risky than Samsung SDI. It trades about -0.04 of its potential returns per unit of risk. Samsung SDI Co is currently generating about -0.09 per unit of risk. If you would invest 783.00 in MELIA HOTELS on September 3, 2024 and sell it today you would lose (97.00) from holding MELIA HOTELS or give up 12.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MELIA HOTELS vs. Samsung SDI Co
Performance |
| Timeline |
| MELIA HOTELS |
| Samsung SDI |
MELIA HOTELS and Samsung SDI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MELIA HOTELS and Samsung SDI
The main advantage of trading using opposite MELIA HOTELS and Samsung SDI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MELIA HOTELS position performs unexpectedly, Samsung SDI 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 Samsung SDI will offset losses from the drop in Samsung SDI's long position.| MELIA HOTELS vs. TOTAL GABON | MELIA HOTELS vs. Walgreens Boots Alliance | MELIA HOTELS vs. Peak Resources Limited |
| Samsung SDI vs. Meli Hotels International | Samsung SDI vs. HYATT HOTELS A | Samsung SDI vs. MELIA HOTELS | Samsung SDI vs. SALESFORCE INC CDR |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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