Correlation Between Meliá Hotels and Playtika Holding
Can any of the company-specific risk be diversified away by investing in both Meliá Hotels and Playtika Holding 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 Playtika Holding 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 Playtika Holding Corp, you can compare the effects of market volatilities on Meliá Hotels and Playtika Holding 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 Playtika Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meliá Hotels and Playtika Holding.
Diversification Opportunities for Meliá Hotels and Playtika Holding
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Meliá and Playtika is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Meli Hotels International and Playtika Holding Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Playtika Holding 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 Playtika Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Playtika Holding Corp has no effect on the direction of Meliá Hotels i.e., Meliá Hotels and Playtika Holding go up and down completely randomly.
Pair Corralation between Meliá Hotels and Playtika Holding
Assuming the 90 days horizon Meli Hotels International is expected to generate 0.96 times more return on investment than Playtika Holding. However, Meli Hotels International is 1.04 times less risky than Playtika Holding. It trades about 0.04 of its potential returns per unit of risk. Playtika Holding Corp is currently generating about 0.02 per unit of risk. If you would invest 617.00 in Meli Hotels International on September 4, 2024 and sell it today you would earn a total of 94.00 from holding Meli Hotels International or generate 15.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.55% |
| Values | Daily Returns |
Meli Hotels International vs. Playtika Holding Corp
Performance |
| Timeline |
| Meli Hotels International |
| Playtika Holding Corp |
Meliá Hotels and Playtika Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meliá Hotels and Playtika Holding
The main advantage of trading using opposite Meliá Hotels and Playtika Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meliá Hotels position performs unexpectedly, Playtika Holding 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 Playtika Holding will offset losses from the drop in Playtika Holding's long position.| Meliá Hotels vs. Skillful Craftsman Education | Meliá Hotels vs. BJs Restaurants | Meliá Hotels vs. Cracker Barrel Old | Meliá Hotels vs. Sphere Entertainment Co |
| Playtika Holding vs. Doubledown Interactive Co | Playtika Holding vs. SohuCom | Playtika Holding vs. Playstudios | Playtika Holding vs. GDEV Inc |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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