Correlation Between Meliá Hotels and PAYPAL
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By analyzing existing cross correlation between Meli Hotels International and PAYPAL HOLDINGS INC, you can compare the effects of market volatilities on Meliá Hotels and PAYPAL 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 PAYPAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meliá Hotels and PAYPAL.
Diversification Opportunities for Meliá Hotels and PAYPAL
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Meliá and PAYPAL is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Meli Hotels International and PAYPAL HOLDINGS INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PAYPAL HOLDINGS INC 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 PAYPAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PAYPAL HOLDINGS INC has no effect on the direction of Meliá Hotels i.e., Meliá Hotels and PAYPAL go up and down completely randomly.
Pair Corralation between Meliá Hotels and PAYPAL
Assuming the 90 days horizon Meli Hotels International is expected to generate 6.39 times more return on investment than PAYPAL. However, Meliá Hotels is 6.39 times more volatile than PAYPAL HOLDINGS INC. It trades about 0.04 of its potential returns per unit of risk. PAYPAL HOLDINGS INC is currently generating about -0.01 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 Against |
| Strength | Insignificant |
| Accuracy | 96.73% |
| Values | Daily Returns |
Meli Hotels International vs. PAYPAL HOLDINGS INC
Performance |
| Timeline |
| Meli Hotels International |
| PAYPAL HOLDINGS INC |
Meliá Hotels and PAYPAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meliá Hotels and PAYPAL
The main advantage of trading using opposite Meliá Hotels and PAYPAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meliá Hotels position performs unexpectedly, PAYPAL 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 PAYPAL will offset losses from the drop in PAYPAL'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 |
| PAYPAL vs. Meli Hotels International | PAYPAL vs. Accel Entertainment | PAYPAL vs. Celsius Holdings | PAYPAL vs. Dennys Corp |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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