Correlation Between OFFICE DEPOT and Meli Hotels
Can any of the company-specific risk be diversified away by investing in both OFFICE DEPOT and Meli Hotels 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 OFFICE DEPOT and Meli Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OFFICE DEPOT and Meli Hotels International, you can compare the effects of market volatilities on OFFICE DEPOT and Meli Hotels 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 OFFICE DEPOT with a short position of Meli Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of OFFICE DEPOT and Meli Hotels.
Diversification Opportunities for OFFICE DEPOT and Meli Hotels
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between OFFICE and Meli is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding OFFICE DEPOT and Meli Hotels International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meli Hotels International and OFFICE DEPOT 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 OFFICE DEPOT are associated (or correlated) with Meli Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meli Hotels International has no effect on the direction of OFFICE DEPOT i.e., OFFICE DEPOT and Meli Hotels go up and down completely randomly.
Pair Corralation between OFFICE DEPOT and Meli Hotels
If you would invest 669.00 in Meli Hotels International on August 29, 2024 and sell it today you would earn a total of 23.00 from holding Meli Hotels International or generate 3.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
OFFICE DEPOT vs. Meli Hotels International
Performance |
| Timeline |
| OFFICE DEPOT |
| Meli Hotels International |
OFFICE DEPOT and Meli Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OFFICE DEPOT and Meli Hotels
The main advantage of trading using opposite OFFICE DEPOT and Meli Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OFFICE DEPOT position performs unexpectedly, Meli Hotels 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 Meli Hotels will offset losses from the drop in Meli Hotels' long position.| OFFICE DEPOT vs. Taylor Morrison Home | OFFICE DEPOT vs. Air New Zealand | OFFICE DEPOT vs. Corsair Gaming | OFFICE DEPOT vs. MI Homes |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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