Correlation Between Elaia Investment and Melia Hotels
Can any of the company-specific risk be diversified away by investing in both Elaia Investment 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 Elaia Investment and Melia Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elaia Investment Spain and Melia Hotels, you can compare the effects of market volatilities on Elaia Investment 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 Elaia Investment with a short position of Melia Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elaia Investment and Melia Hotels.
Diversification Opportunities for Elaia Investment and Melia Hotels
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Elaia and Melia is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Elaia Investment Spain and Melia Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Melia Hotels and Elaia Investment 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 Elaia Investment Spain 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 Elaia Investment i.e., Elaia Investment and Melia Hotels go up and down completely randomly.
Pair Corralation between Elaia Investment and Melia Hotels
Assuming the 90 days trading horizon Elaia Investment is expected to generate 1.77 times less return on investment than Melia Hotels. In addition to that, Elaia Investment is 1.97 times more volatile than Melia Hotels. It trades about 0.01 of its total potential returns per unit of risk. Melia Hotels is currently generating about 0.04 per unit of volatility. If you would invest 511.00 in Melia Hotels on August 30, 2024 and sell it today you would earn a total of 163.00 from holding Melia Hotels or generate 31.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Elaia Investment Spain vs. Melia Hotels
Performance |
| Timeline |
| Elaia Investment Spain |
| Melia Hotels |
Elaia Investment and Melia Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elaia Investment and Melia Hotels
The main advantage of trading using opposite Elaia Investment and Melia Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elaia Investment 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.| Elaia Investment vs. Metrovacesa SA | Elaia Investment vs. Atom Hoteles Socimi | Elaia Investment vs. Aedas Homes SL | Elaia Investment vs. Hispanotels Inversiones SOCIMI |
| Melia Hotels vs. Biotechnology Assets SA | Melia Hotels vs. Aedas Homes SL | Melia Hotels vs. Arrienda Rental Properties | Melia Hotels vs. Elaia Investment Spain |
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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |