Correlation Between CVR Partners and Meliá Hotels
Can any of the company-specific risk be diversified away by investing in both CVR Partners and Meliá 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 CVR Partners and Meliá Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CVR Partners LP and Meli Hotels International, you can compare the effects of market volatilities on CVR Partners and Meliá 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 CVR Partners with a short position of Meliá Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVR Partners and Meliá Hotels.
Diversification Opportunities for CVR Partners and Meliá Hotels
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between CVR and Meliá is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding CVR Partners LP and Meli Hotels International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meli Hotels International and CVR Partners 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 CVR Partners LP are associated (or correlated) with Meliá Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meli Hotels International has no effect on the direction of CVR Partners i.e., CVR Partners and Meliá Hotels go up and down completely randomly.
Pair Corralation between CVR Partners and Meliá Hotels
Considering the 90-day investment horizon CVR Partners LP is expected to generate 0.56 times more return on investment than Meliá Hotels. However, CVR Partners LP is 1.77 times less risky than Meliá Hotels. It trades about 0.17 of its potential returns per unit of risk. Meli Hotels International is currently generating about -0.22 per unit of risk. If you would invest 7,702 in CVR Partners LP on November 3, 2024 and sell it today you would earn a total of 448.00 from holding CVR Partners LP or generate 5.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
CVR Partners LP vs. Meli Hotels International
Performance |
| Timeline |
| CVR Partners LP |
| Meli Hotels International |
CVR Partners and Meliá Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CVR Partners and Meliá Hotels
The main advantage of trading using opposite CVR Partners and Meliá Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVR Partners position performs unexpectedly, Meliá 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 Meliá Hotels will offset losses from the drop in Meliá Hotels' long position.| CVR Partners vs. CF Industries Holdings | CVR Partners vs. The Mosaic | CVR Partners vs. American Vanguard | CVR Partners vs. ICL Israel Chemicals |
| Meliá Hotels vs. Videolocity International | Meliá Hotels vs. Xunlei Ltd Adr | Meliá Hotels vs. Oatly Group AB | Meliá Hotels vs. BOS Better Online |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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