Correlation Between Meliá Hotels and Biglari Holdings
Can any of the company-specific risk be diversified away by investing in both Meliá Hotels and Biglari Holdings 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 Meliá Hotels and Biglari Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Meli Hotels International and Biglari Holdings, you can compare the effects of market volatilities on Meliá Hotels and Biglari Holdings 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 Meliá Hotels with a short position of Biglari Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meliá Hotels and Biglari Holdings.
Diversification Opportunities for Meliá Hotels and Biglari Holdings
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Meliá and Biglari is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Meli Hotels International and Biglari Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biglari Holdings and Meliá Hotels 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 Meli Hotels International are associated (or correlated) with Biglari Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biglari Holdings has no effect on the direction of Meliá Hotels i.e., Meliá Hotels and Biglari Holdings go up and down completely randomly.
Pair Corralation between Meliá Hotels and Biglari Holdings
If you would invest 17,300 in Biglari Holdings on August 31, 2024 and sell it today you would earn a total of 4,200 from holding Biglari Holdings or generate 24.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Meli Hotels International vs. Biglari Holdings
Performance |
| Timeline |
| Meli Hotels International |
| Biglari Holdings |
Meliá Hotels and Biglari Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meliá Hotels and Biglari Holdings
The main advantage of trading using opposite Meliá Hotels and Biglari Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meliá Hotels position performs unexpectedly, Biglari Holdings 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 Biglari Holdings will offset losses from the drop in Biglari Holdings' long position.| Meliá Hotels vs. Marriott International | Meliá Hotels vs. Hilton Worldwide Holdings | Meliá Hotels vs. InterContinental Hotels Group | Meliá Hotels vs. InterContinental Hotels Group |
| Biglari Holdings vs. Cannae Holdings | Biglari Holdings vs. BJs Restaurants | Biglari Holdings vs. Ark Restaurants Corp | Biglari Holdings vs. Noble Romans |
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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