Correlation Between Meliá Hotels and Yuexiu Transport
Can any of the company-specific risk be diversified away by investing in both Meliá Hotels and Yuexiu Transport 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 Yuexiu Transport 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 Yuexiu Transport Infrastructure, you can compare the effects of market volatilities on Meliá Hotels and Yuexiu Transport 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 Yuexiu Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meliá Hotels and Yuexiu Transport.
Diversification Opportunities for Meliá Hotels and Yuexiu Transport
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Meliá and Yuexiu is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Meli Hotels International and Yuexiu Transport Infrastructur in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yuexiu Transport Inf 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 Yuexiu Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yuexiu Transport Inf has no effect on the direction of Meliá Hotels i.e., Meliá Hotels and Yuexiu Transport go up and down completely randomly.
Pair Corralation between Meliá Hotels and Yuexiu Transport
Assuming the 90 days horizon Meli Hotels International is expected to generate 11.22 times more return on investment than Yuexiu Transport. However, Meliá Hotels is 11.22 times more volatile than Yuexiu Transport Infrastructure. It trades about 0.05 of its potential returns per unit of risk. Yuexiu Transport Infrastructure is currently generating about 0.09 per unit of risk. If you would invest 584.00 in Meli Hotels International on January 11, 2025 and sell it today you would earn a total of 72.00 from holding Meli Hotels International or generate 12.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 19.84% |
| Values | Daily Returns |
Meli Hotels International vs. Yuexiu Transport Infrastructur
Performance |
| Timeline |
| Meli Hotels International |
| Yuexiu Transport Inf |
Meliá Hotels and Yuexiu Transport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meliá Hotels and Yuexiu Transport
The main advantage of trading using opposite Meliá Hotels and Yuexiu Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meliá Hotels position performs unexpectedly, Yuexiu Transport 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 Yuexiu Transport will offset losses from the drop in Yuexiu Transport's long position.| Meliá Hotels vs. Triton International Limited | Meliá Hotels vs. Enel Chile SA | Meliá Hotels vs. AerCap Holdings NV | Meliá Hotels vs. Willscot Mobile Mini |
| Yuexiu Transport vs. Zhejiang Expressway Co | Yuexiu Transport vs. Jiangsu Expressway Co | Yuexiu Transport vs. Jiangsu Expressway | Yuexiu Transport vs. Verra Mobility Corp |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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