Correlation Between ENBCN and Meli Hotels
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By analyzing existing cross correlation between ENBCN 57 08 MAR 33 and Meli Hotels International, you can compare the effects of market volatilities on ENBCN and Meli 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 ENBCN with a short position of Meli Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of ENBCN and Meli Hotels.
Diversification Opportunities for ENBCN and Meli Hotels
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ENBCN and Meli is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding ENBCN 57 08 MAR 33 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 ENBCN 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 ENBCN 57 08 MAR 33 are associated (or correlated) with Meli 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 ENBCN i.e., ENBCN and Meli Hotels go up and down completely randomly.
Pair Corralation between ENBCN and Meli Hotels
Assuming the 90 days trading horizon ENBCN 57 08 MAR 33 is expected to under-perform the Meli Hotels. But the bond apears to be less risky and, when comparing its historical volatility, ENBCN 57 08 MAR 33 is 1.74 times less risky than Meli Hotels. The bond trades about -0.17 of its potential returns per unit of risk. The Meli Hotels International is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 711.00 in Meli Hotels International on September 13, 2024 and sell it today you would earn a total of 68.00 from holding Meli Hotels International or generate 9.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
ENBCN 57 08 MAR 33 vs. Meli Hotels International
Performance |
| Timeline |
| ENBCN 57 08 |
| Meli Hotels International |
ENBCN and Meli Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ENBCN and Meli Hotels
The main advantage of trading using opposite ENBCN and Meli Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ENBCN position performs unexpectedly, Meli 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 Meli Hotels will offset losses from the drop in Meli Hotels' long position.The idea behind ENBCN 57 08 MAR 33 and Meli Hotels International pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Meli Hotels vs. Marriott International | Meli Hotels vs. Hilton Worldwide Holdings | Meli Hotels vs. InterContinental Hotels Group | Meli Hotels vs. Accor SA |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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