Correlation Between PPHE Hotel and Melia Hotels
Can any of the company-specific risk be diversified away by investing in both PPHE Hotel and Melia 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 PPHE Hotel and Melia Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PPHE Hotel Group and Melia Hotels, you can compare the effects of market volatilities on PPHE Hotel and Melia 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 PPHE Hotel with a short position of Melia Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of PPHE Hotel and Melia Hotels.
Diversification Opportunities for PPHE Hotel and Melia Hotels
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PPHE and Melia is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding PPHE Hotel Group and Melia Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Melia Hotels and PPHE Hotel 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 PPHE Hotel Group are associated (or correlated) with Melia Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Melia Hotels has no effect on the direction of PPHE Hotel i.e., PPHE Hotel and Melia Hotels go up and down completely randomly.
Pair Corralation between PPHE Hotel and Melia Hotels
Assuming the 90 days trading horizon PPHE Hotel Group is expected to under-perform the Melia Hotels. In addition to that, PPHE Hotel is 1.11 times more volatile than Melia Hotels. It trades about -0.24 of its total potential returns per unit of risk. Melia Hotels is currently generating about -0.01 per unit of volatility. If you would invest 680.00 in Melia Hotels on September 1, 2024 and sell it today you would lose (3.00) from holding Melia Hotels or give up 0.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PPHE Hotel Group vs. Melia Hotels
Performance |
| Timeline |
| PPHE Hotel Group |
| Melia Hotels |
PPHE Hotel and Melia Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PPHE Hotel and Melia Hotels
The main advantage of trading using opposite PPHE Hotel and Melia Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PPHE Hotel position performs unexpectedly, Melia 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 Melia Hotels will offset losses from the drop in Melia Hotels' long position.| PPHE Hotel vs. AMG Advanced Metallurgical | PPHE Hotel vs. GreenX Metals | PPHE Hotel vs. Thor Mining PLC | PPHE Hotel vs. Silvercorp Metals |
| Melia Hotels vs. Uniper SE | Melia Hotels vs. Mulberry Group PLC | Melia Hotels vs. London Security Plc | Melia Hotels vs. Triad Group PLC |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |