Correlation Between Meliá Hotels and Sun Country
Can any of the company-specific risk be diversified away by investing in both Meliá Hotels and Sun Country 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 Sun Country 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 Sun Country Airlines, you can compare the effects of market volatilities on Meliá Hotels and Sun Country 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 Sun Country. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meliá Hotels and Sun Country.
Diversification Opportunities for Meliá Hotels and Sun Country
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Meliá and Sun is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Meli Hotels International and Sun Country Airlines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sun Country Airlines 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 Sun Country. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sun Country Airlines has no effect on the direction of Meliá Hotels i.e., Meliá Hotels and Sun Country go up and down completely randomly.
Pair Corralation between Meliá Hotels and Sun Country
If you would invest 1,405 in Sun Country Airlines on September 1, 2024 and sell it today you would earn a total of 34.00 from holding Sun Country Airlines or generate 2.42% 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. Sun Country Airlines
Performance |
| Timeline |
| Meli Hotels International |
| Sun Country Airlines |
Meliá Hotels and Sun Country Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meliá Hotels and Sun Country
The main advantage of trading using opposite Meliá Hotels and Sun Country positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meliá Hotels position performs unexpectedly, Sun Country 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 Sun Country will offset losses from the drop in Sun Country'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 |
| Sun Country vs. JetBlue Airways Corp | Sun Country vs. Allegiant Travel | Sun Country vs. Copa Holdings SA | Sun Country vs. SkyWest |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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