Correlation Between Meliá Hotels and Lifevantage
Can any of the company-specific risk be diversified away by investing in both Meliá Hotels and Lifevantage 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 Lifevantage 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 Lifevantage, you can compare the effects of market volatilities on Meliá Hotels and Lifevantage 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 Lifevantage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meliá Hotels and Lifevantage.
Diversification Opportunities for Meliá Hotels and Lifevantage
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Meliá and Lifevantage is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Meli Hotels International and Lifevantage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifevantage 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 Lifevantage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lifevantage has no effect on the direction of Meliá Hotels i.e., Meliá Hotels and Lifevantage go up and down completely randomly.
Pair Corralation between Meliá Hotels and Lifevantage
If you would invest 1,222 in Lifevantage on September 1, 2024 and sell it today you would earn a total of 239.00 from holding Lifevantage or generate 19.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Meli Hotels International vs. Lifevantage
Performance |
| Timeline |
| Meli Hotels International |
| Lifevantage |
Meliá Hotels and Lifevantage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meliá Hotels and Lifevantage
The main advantage of trading using opposite Meliá Hotels and Lifevantage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meliá Hotels position performs unexpectedly, Lifevantage 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 Lifevantage will offset losses from the drop in Lifevantage's long position.| Meliá Hotels vs. Cedar Realty Trust | Meliá Hotels vs. National Beverage Corp | Meliá Hotels vs. Vita Coco | Meliá Hotels vs. Grocery Outlet Holding |
| Lifevantage vs. Seneca Foods Corp | Lifevantage vs. Central Garden Pet | Lifevantage vs. Central Garden Pet | Lifevantage vs. Lifeway Foods |
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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