Correlation Between Meliá Hotels and PGE Corp
Can any of the company-specific risk be diversified away by investing in both Meliá Hotels and PGE Corp 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 PGE Corp 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 PGE Corp, you can compare the effects of market volatilities on Meliá Hotels and PGE Corp 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 PGE Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meliá Hotels and PGE Corp.
Diversification Opportunities for Meliá Hotels and PGE Corp
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Meliá and PGE is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Meli Hotels International and PGE Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PGE Corp 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 PGE Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PGE Corp has no effect on the direction of Meliá Hotels i.e., Meliá Hotels and PGE Corp go up and down completely randomly.
Pair Corralation between Meliá Hotels and PGE Corp
If you would invest 2,022 in PGE Corp on September 1, 2024 and sell it today you would earn a total of 141.00 from holding PGE Corp or generate 6.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Meli Hotels International vs. PGE Corp
Performance |
| Timeline |
| Meli Hotels International |
| PGE Corp |
Meliá Hotels and PGE Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meliá Hotels and PGE Corp
The main advantage of trading using opposite Meliá Hotels and PGE Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meliá Hotels position performs unexpectedly, PGE Corp 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 PGE Corp will offset losses from the drop in PGE Corp'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 |
| PGE Corp vs. Consolidated Edison | PGE Corp vs. Southern Company | PGE Corp vs. Entergy | PGE Corp vs. Pinnacle West Capital |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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