Correlation Between PULSION Medical and MELIA HOTELS
Can any of the company-specific risk be diversified away by investing in both PULSION Medical 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 PULSION Medical and MELIA HOTELS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PULSION Medical Systems and MELIA HOTELS, you can compare the effects of market volatilities on PULSION Medical 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 PULSION Medical with a short position of MELIA HOTELS. Check out your portfolio center. Please also check ongoing floating volatility patterns of PULSION Medical and MELIA HOTELS.
Diversification Opportunities for PULSION Medical and MELIA HOTELS
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between PULSION and MELIA is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding PULSION Medical Systems and MELIA HOTELS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MELIA HOTELS and PULSION Medical 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 PULSION Medical Systems 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 PULSION Medical i.e., PULSION Medical and MELIA HOTELS go up and down completely randomly.
Pair Corralation between PULSION Medical and MELIA HOTELS
Assuming the 90 days trading horizon PULSION Medical Systems is expected to generate 0.19 times more return on investment than MELIA HOTELS. However, PULSION Medical Systems is 5.3 times less risky than MELIA HOTELS. It trades about 0.33 of its potential returns per unit of risk. MELIA HOTELS is currently generating about -0.17 per unit of risk. If you would invest 1,590 in PULSION Medical Systems on October 25, 2024 and sell it today you would earn a total of 30.00 from holding PULSION Medical Systems or generate 1.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PULSION Medical Systems vs. MELIA HOTELS
Performance |
| Timeline |
| PULSION Medical Systems |
| MELIA HOTELS |
PULSION Medical and MELIA HOTELS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PULSION Medical and MELIA HOTELS
The main advantage of trading using opposite PULSION Medical and MELIA HOTELS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PULSION Medical 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's long position.| PULSION Medical vs. PT Bank Mandiri | PULSION Medical vs. BANK MANDIRI | PULSION Medical vs. BANK MANDIRI | PULSION Medical vs. BANK MANDIRI |
| MELIA HOTELS vs. Apple Inc | MELIA HOTELS vs. Apple Inc | MELIA HOTELS vs. Apple Inc | MELIA HOTELS vs. Apple Inc |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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