Correlation Between Meliá Hotels and Supercom
Can any of the company-specific risk be diversified away by investing in both Meliá Hotels and Supercom 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 Supercom 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 Supercom, you can compare the effects of market volatilities on Meliá Hotels and Supercom 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 Supercom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meliá Hotels and Supercom.
Diversification Opportunities for Meliá Hotels and Supercom
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Meliá and Supercom is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Meli Hotels International and Supercom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Supercom 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 Supercom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Supercom has no effect on the direction of Meliá Hotels i.e., Meliá Hotels and Supercom go up and down completely randomly.
Pair Corralation between Meliá Hotels and Supercom
Assuming the 90 days horizon Meli Hotels International is expected to under-perform the Supercom. But the pink sheet apears to be less risky and, when comparing its historical volatility, Meli Hotels International is 2.41 times less risky than Supercom. The pink sheet trades about -0.06 of its potential returns per unit of risk. The Supercom is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 400.00 in Supercom on August 30, 2024 and sell it today you would lose (52.00) from holding Supercom or give up 13.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 92.06% |
| Values | Daily Returns |
Meli Hotels International vs. Supercom
Performance |
| Timeline |
| Meli Hotels International |
| Supercom |
Meliá Hotels and Supercom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meliá Hotels and Supercom
The main advantage of trading using opposite Meliá Hotels and Supercom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meliá Hotels position performs unexpectedly, Supercom 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 Supercom will offset losses from the drop in Supercom's long position.| Meliá Hotels vs. Cedar Realty Trust | Meliá Hotels vs. Grocery Outlet Holding | Meliá Hotels vs. Dominos Pizza | Meliá Hotels vs. Tradeweb Markets |
| Supercom vs. Fabrinet | Supercom vs. Knowles Cor | Supercom vs. Ubiquiti Networks | Supercom vs. AmpliTech 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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