Correlation Between SPECTRAL MEDICAL and Meliá Hotels
Can any of the company-specific risk be diversified away by investing in both SPECTRAL MEDICAL 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 SPECTRAL MEDICAL and Meliá Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPECTRAL MEDICAL and Meli Hotels International, you can compare the effects of market volatilities on SPECTRAL MEDICAL 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 SPECTRAL MEDICAL with a short position of Meliá Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPECTRAL MEDICAL and Meliá Hotels.
Diversification Opportunities for SPECTRAL MEDICAL and Meliá Hotels
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SPECTRAL and Meliá is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding SPECTRAL MEDICAL 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 SPECTRAL 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 SPECTRAL MEDICAL 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 SPECTRAL MEDICAL i.e., SPECTRAL MEDICAL and Meliá Hotels go up and down completely randomly.
Pair Corralation between SPECTRAL MEDICAL and Meliá Hotels
Assuming the 90 days horizon SPECTRAL MEDICAL is expected to generate 2.95 times more return on investment than Meliá Hotels. However, SPECTRAL MEDICAL is 2.95 times more volatile than Meli Hotels International. It trades about 0.05 of its potential returns per unit of risk. Meli Hotels International is currently generating about 0.03 per unit of risk. If you would invest 21.00 in SPECTRAL MEDICAL on October 16, 2024 and sell it today you would earn a total of 16.00 from holding SPECTRAL MEDICAL or generate 76.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPECTRAL MEDICAL vs. Meli Hotels International
Performance |
| Timeline |
| SPECTRAL MEDICAL |
| Meli Hotels International |
SPECTRAL MEDICAL and Meliá Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPECTRAL MEDICAL and Meliá Hotels
The main advantage of trading using opposite SPECTRAL MEDICAL and Meliá Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPECTRAL MEDICAL 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.| SPECTRAL MEDICAL vs. Wayside Technology Group | SPECTRAL MEDICAL vs. Comba Telecom Systems | SPECTRAL MEDICAL vs. FANDIFI TECHNOLOGY P | SPECTRAL MEDICAL vs. ecotel communication ag |
| Meliá Hotels vs. NXP Semiconductors NV | Meliá Hotels vs. SPECTRAL MEDICAL | Meliá Hotels vs. Nordic Semiconductor ASA | Meliá Hotels vs. Advanced Medical Solutions |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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