Correlation Between BANK MANDIRI and Meli Hotels
Can any of the company-specific risk be diversified away by investing in both BANK MANDIRI 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 BANK MANDIRI and Meli Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BANK MANDIRI and Meli Hotels International, you can compare the effects of market volatilities on BANK MANDIRI 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 BANK MANDIRI with a short position of Meli Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK MANDIRI and Meli Hotels.
Diversification Opportunities for BANK MANDIRI and Meli Hotels
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between BANK and Meli is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding BANK MANDIRI 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 BANK MANDIRI 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 BANK MANDIRI 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 BANK MANDIRI i.e., BANK MANDIRI and Meli Hotels go up and down completely randomly.
Pair Corralation between BANK MANDIRI and Meli Hotels
Assuming the 90 days trading horizon BANK MANDIRI is expected to generate 1.18 times less return on investment than Meli Hotels. In addition to that, BANK MANDIRI is 1.09 times more volatile than Meli Hotels International. It trades about 0.04 of its total potential returns per unit of risk. Meli Hotels International is currently generating about 0.05 per unit of volatility. If you would invest 492.00 in Meli Hotels International on August 29, 2024 and sell it today you would earn a total of 200.00 from holding Meli Hotels International or generate 40.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BANK MANDIRI vs. Meli Hotels International
Performance |
| Timeline |
| BANK MANDIRI |
| Meli Hotels International |
BANK MANDIRI and Meli Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANK MANDIRI and Meli Hotels
The main advantage of trading using opposite BANK MANDIRI and Meli Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK MANDIRI 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.| BANK MANDIRI vs. Apple Inc | BANK MANDIRI vs. Apple Inc | BANK MANDIRI vs. Superior Plus Corp | BANK MANDIRI vs. SIVERS SEMICONDUCTORS AB |
| Meli Hotels vs. Hyatt Hotels | Meli Hotels vs. InterContinental Hotels Group | Meli Hotels vs. ACCOR SPADR NEW | Meli Hotels vs. Choice Hotels International |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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