Correlation Between Meliá Hotels and RCI Hospitality
Can any of the company-specific risk be diversified away by investing in both Meliá Hotels and RCI Hospitality 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 RCI Hospitality 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 RCI Hospitality Holdings, you can compare the effects of market volatilities on Meliá Hotels and RCI Hospitality 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 RCI Hospitality. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meliá Hotels and RCI Hospitality.
Diversification Opportunities for Meliá Hotels and RCI Hospitality
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Meliá and RCI is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Meli Hotels International and RCI Hospitality Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RCI Hospitality 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 RCI Hospitality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RCI Hospitality Holdings has no effect on the direction of Meliá Hotels i.e., Meliá Hotels and RCI Hospitality go up and down completely randomly.
Pair Corralation between Meliá Hotels and RCI Hospitality
If you would invest 4,470 in RCI Hospitality Holdings on August 29, 2024 and sell it today you would earn a total of 734.00 from holding RCI Hospitality Holdings or generate 16.42% 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. RCI Hospitality Holdings
Performance |
| Timeline |
| Meli Hotels International |
| RCI Hospitality Holdings |
Meliá Hotels and RCI Hospitality Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meliá Hotels and RCI Hospitality
The main advantage of trading using opposite Meliá Hotels and RCI Hospitality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meliá Hotels position performs unexpectedly, RCI Hospitality 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 RCI Hospitality will offset losses from the drop in RCI Hospitality's 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 |
| RCI Hospitality vs. Jack In The | RCI Hospitality vs. Potbelly Co | RCI Hospitality vs. Rave Restaurant Group |
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 CEOs Directory module to screen CEOs from public companies around the world.
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