Correlation Between Meli Hotels and United Homes
Can any of the company-specific risk be diversified away by investing in both Meli Hotels and United Homes 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 Meli Hotels and United Homes 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 United Homes Group, you can compare the effects of market volatilities on Meli Hotels and United Homes 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 Meli Hotels with a short position of United Homes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meli Hotels and United Homes.
Diversification Opportunities for Meli Hotels and United Homes
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Meli and United is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Meli Hotels International and United Homes Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Homes Group and Meli 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 United Homes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Homes Group has no effect on the direction of Meli Hotels i.e., Meli Hotels and United Homes go up and down completely randomly.
Pair Corralation between Meli Hotels and United Homes
Assuming the 90 days horizon Meli Hotels International is expected to generate 0.36 times more return on investment than United Homes. However, Meli Hotels International is 2.81 times less risky than United Homes. It trades about 0.21 of its potential returns per unit of risk. United Homes Group is currently generating about -0.28 per unit of risk. If you would invest 711.00 in Meli Hotels International on September 13, 2024 and sell it today you would earn a total of 68.00 from holding Meli Hotels International or generate 9.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Meli Hotels International vs. United Homes Group
Performance |
| Timeline |
| Meli Hotels International |
| United Homes Group |
Meli Hotels and United Homes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meli Hotels and United Homes
The main advantage of trading using opposite Meli Hotels and United Homes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meli Hotels position performs unexpectedly, United Homes 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 United Homes will offset losses from the drop in United Homes' long position.| Meli Hotels vs. The Coca Cola | Meli Hotels vs. Scandinavian Tobacco Group | Meli Hotels vs. NETGEAR | Meli Hotels vs. Iridium Communications |
| United Homes vs. Stepstone Group | United Homes vs. SEI Investments | United Homes vs. Morgan Stanley | United Homes vs. Aldel Financial II |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |