Correlation Between 06051GFX2 and Meliá Hotels
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By analyzing existing cross correlation between BANK AMER P and Meli Hotels International, you can compare the effects of market volatilities on 06051GFX2 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 06051GFX2 with a short position of Meliá Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of 06051GFX2 and Meliá Hotels.
Diversification Opportunities for 06051GFX2 and Meliá Hotels
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 06051GFX2 and Meliá is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding BANK AMER P 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 06051GFX2 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 BANK AMER P 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 06051GFX2 i.e., 06051GFX2 and Meliá Hotels go up and down completely randomly.
Pair Corralation between 06051GFX2 and Meliá Hotels
Assuming the 90 days trading horizon 06051GFX2 is expected to generate 39.43 times less return on investment than Meliá Hotels. But when comparing it to its historical volatility, BANK AMER P is 7.09 times less risky than Meliá Hotels. It trades about 0.01 of its potential returns per unit of risk. Meli Hotels International is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 617.00 in Meli Hotels International on September 2, 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 | 96.36% |
| Values | Daily Returns |
BANK AMER P vs. Meli Hotels International
Performance |
| Timeline |
| BANK AMER P |
| Meli Hotels International |
06051GFX2 and Meliá Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 06051GFX2 and Meliá Hotels
The main advantage of trading using opposite 06051GFX2 and Meliá Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 06051GFX2 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.| 06051GFX2 vs. Sweetgreen | 06051GFX2 vs. Meli Hotels International | 06051GFX2 vs. Dennys Corp | 06051GFX2 vs. Playtika Holding Corp |
| Meliá Hotels vs. SunLink Health Systems | Meliá Hotels vs. Dana Inc | Meliá Hotels vs. Gentex | Meliá Hotels vs. Simon Property Group |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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