Correlation Between Tubos Reunidos and Melia Hotels
Can any of the company-specific risk be diversified away by investing in both Tubos Reunidos 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 Tubos Reunidos and Melia Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tubos Reunidos SA and Melia Hotels, you can compare the effects of market volatilities on Tubos Reunidos 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 Tubos Reunidos with a short position of Melia Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tubos Reunidos and Melia Hotels.
Diversification Opportunities for Tubos Reunidos and Melia Hotels
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tubos and Melia is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Tubos Reunidos SA and Melia Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Melia Hotels and Tubos Reunidos 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 Tubos Reunidos SA 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 Tubos Reunidos i.e., Tubos Reunidos and Melia Hotels go up and down completely randomly.
Pair Corralation between Tubos Reunidos and Melia Hotels
Assuming the 90 days trading horizon Tubos Reunidos SA is expected to generate 2.6 times more return on investment than Melia Hotels. However, Tubos Reunidos is 2.6 times more volatile than Melia Hotels. It trades about 0.16 of its potential returns per unit of risk. Melia Hotels is currently generating about -0.21 per unit of risk. If you would invest 49.00 in Tubos Reunidos SA on October 24, 2024 and sell it today you would earn a total of 5.00 from holding Tubos Reunidos SA or generate 10.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tubos Reunidos SA vs. Melia Hotels
Performance |
| Timeline |
| Tubos Reunidos SA |
| Melia Hotels |
Tubos Reunidos and Melia Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tubos Reunidos and Melia Hotels
The main advantage of trading using opposite Tubos Reunidos and Melia Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tubos Reunidos 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.| Tubos Reunidos vs. Vytrus Biotech SA | Tubos Reunidos vs. Cellnex Telecom SA | Tubos Reunidos vs. Energy Solar Tech | Tubos Reunidos vs. Arrienda Rental Properties |
| Melia Hotels vs. International Consolidated Airlines | Melia Hotels vs. Merlin Properties SOCIMI | Melia Hotels vs. Aena SA | Melia Hotels vs. Acerinox |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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