Correlation Between Meliá Hotels and SANDS
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By analyzing existing cross correlation between Meli Hotels International and SANDS CHINA LTD, you can compare the effects of market volatilities on Meliá Hotels and SANDS 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 SANDS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meliá Hotels and SANDS.
Diversification Opportunities for Meliá Hotels and SANDS
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Meliá and SANDS is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Meli Hotels International and SANDS CHINA LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SANDS CHINA LTD 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 SANDS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SANDS CHINA LTD has no effect on the direction of Meliá Hotels i.e., Meliá Hotels and SANDS go up and down completely randomly.
Pair Corralation between Meliá Hotels and SANDS
Assuming the 90 days horizon Meli Hotels International is expected to generate 2.85 times more return on investment than SANDS. However, Meliá Hotels is 2.85 times more volatile than SANDS CHINA LTD. It trades about 0.04 of its potential returns per unit of risk. SANDS CHINA LTD is currently generating about 0.03 per unit of risk. If you would invest 595.00 in Meli Hotels International on September 4, 2024 and sell it today you would earn a total of 116.00 from holding Meli Hotels International or generate 19.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.34% |
| Values | Daily Returns |
Meli Hotels International vs. SANDS CHINA LTD
Performance |
| Timeline |
| Meli Hotels International |
| SANDS CHINA LTD |
Meliá Hotels and SANDS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meliá Hotels and SANDS
The main advantage of trading using opposite Meliá Hotels and SANDS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meliá Hotels position performs unexpectedly, SANDS 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 SANDS will offset losses from the drop in SANDS'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 |
| SANDS vs. AEP TEX INC | SANDS vs. US BANK NATIONAL | SANDS vs. Jackson Financial | SANDS vs. Brera Holdings PLC |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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