Correlation Between Royalty Management and Meliá Hotels
Can any of the company-specific risk be diversified away by investing in both Royalty Management and Meliá 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 Royalty Management and Meliá Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Royalty Management Holding and Meli Hotels International, you can compare the effects of market volatilities on Royalty Management and Meliá 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 Royalty Management with a short position of Meliá Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Royalty Management and Meliá Hotels.
Diversification Opportunities for Royalty Management and Meliá Hotels
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Royalty and Meliá is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Royalty Management Holding 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 Royalty Management 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 Royalty Management Holding are associated (or correlated) with Meliá 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 Royalty Management i.e., Royalty Management and Meliá Hotels go up and down completely randomly.
Pair Corralation between Royalty Management and Meliá Hotels
Given the investment horizon of 90 days Royalty Management Holding is expected to generate 0.96 times more return on investment than Meliá Hotels. However, Royalty Management Holding is 1.04 times less risky than Meliá Hotels. It trades about 0.22 of its potential returns per unit of risk. Meli Hotels International is currently generating about -0.22 per unit of risk. If you would invest 104.00 in Royalty Management Holding on November 3, 2024 and sell it today you would earn a total of 13.00 from holding Royalty Management Holding or generate 12.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Royalty Management Holding vs. Meli Hotels International
Performance |
| Timeline |
| Royalty Management |
| Meli Hotels International |
Royalty Management and Meliá Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Royalty Management and Meliá Hotels
The main advantage of trading using opposite Royalty Management and Meliá Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Royalty Management position performs unexpectedly, Meliá 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 Meliá Hotels will offset losses from the drop in Meliá Hotels' long position.| Royalty Management vs. Flutter Entertainment plc | Royalty Management vs. Mediag3 | Royalty Management vs. Playa Hotels Resorts | Royalty Management vs. Glorywin Entertainment Group |
| Meliá Hotels vs. Videolocity International | Meliá Hotels vs. Xunlei Ltd Adr | Meliá Hotels vs. Oatly Group AB | Meliá Hotels vs. BOS Better Online |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |