Correlation Between Secure Property and Melia Hotels
Can any of the company-specific risk be diversified away by investing in both Secure Property and Melia Hotels 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 Secure Property and Melia Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Secure Property Development and Melia Hotels, you can compare the effects of market volatilities on Secure Property and Melia Hotels 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 Secure Property with a short position of Melia Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Secure Property and Melia Hotels.
Diversification Opportunities for Secure Property and Melia Hotels
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Secure and Melia is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Secure Property Development and Melia Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Melia Hotels and Secure Property 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 Secure Property Development are associated (or correlated) with Melia Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Melia Hotels has no effect on the direction of Secure Property i.e., Secure Property and Melia Hotels go up and down completely randomly.
Pair Corralation between Secure Property and Melia Hotels
If you would invest 450.00 in Secure Property Development on September 4, 2024 and sell it today you would earn a total of 0.00 from holding Secure Property Development or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Secure Property Development vs. Melia Hotels
Performance |
| Timeline |
| Secure Property Deve |
| Melia Hotels |
Secure Property and Melia Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Secure Property and Melia Hotels
The main advantage of trading using opposite Secure Property and Melia Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Secure Property position performs unexpectedly, Melia Hotels 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 Melia Hotels will offset losses from the drop in Melia Hotels' long position.| Secure Property vs. Inspiration Healthcare Group | Secure Property vs. Endeavour Mining Corp | Secure Property vs. Bisichi Mining PLC | Secure Property vs. Silvercorp Metals |
| Melia Hotels vs. Samsung Electronics Co | Melia Hotels vs. Samsung Electronics Co | Melia Hotels vs. Hyundai Motor | Melia Hotels vs. Toyota Motor 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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