Correlation Between Vastned Retail and Meli Hotels
Can any of the company-specific risk be diversified away by investing in both Vastned Retail and Meli 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 Vastned Retail and Meli Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vastned Retail NV and Meli Hotels International, you can compare the effects of market volatilities on Vastned Retail 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 Vastned Retail with a short position of Meli Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vastned Retail and Meli Hotels.
Diversification Opportunities for Vastned Retail and Meli Hotels
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Vastned and Meli is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Vastned Retail NV 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 Vastned Retail 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 Vastned Retail NV 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 Vastned Retail i.e., Vastned Retail and Meli Hotels go up and down completely randomly.
Pair Corralation between Vastned Retail and Meli Hotels
Assuming the 90 days horizon Vastned Retail is expected to generate 1.79 times less return on investment than Meli Hotels. But when comparing it to its historical volatility, Vastned Retail NV is 1.31 times less risky than Meli Hotels. It trades about 0.04 of its potential returns per unit of risk. Meli Hotels International is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 455.00 in Meli Hotels International on September 14, 2024 and sell it today you would earn a total of 263.00 from holding Meli Hotels International or generate 57.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vastned Retail NV vs. Meli Hotels International
Performance |
| Timeline |
| Vastned Retail NV |
| Meli Hotels International |
Vastned Retail and Meli Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vastned Retail and Meli Hotels
The main advantage of trading using opposite Vastned Retail and Meli Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vastned Retail 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.| Vastned Retail vs. Vicinity Centres | Vastned Retail vs. Superior Plus Corp | Vastned Retail vs. NMI Holdings | Vastned Retail vs. SIVERS SEMICONDUCTORS AB |
| Meli Hotels vs. Hyatt Hotels | Meli Hotels vs. InterContinental Hotels Group | Meli Hotels vs. INTERCONT HOTELS | Meli Hotels vs. Wyndham Hotels Resorts |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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