Correlation Between Bet At and Melia Hotels
Can any of the company-specific risk be diversified away by investing in both Bet At 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 Bet At and Melia Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between bet at home AG and Melia Hotels, you can compare the effects of market volatilities on Bet At 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 Bet At with a short position of Melia Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bet At and Melia Hotels.
Diversification Opportunities for Bet At and Melia Hotels
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bet and Melia is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding bet at home AG and Melia Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Melia Hotels and Bet At 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 bet at home AG 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 Bet At i.e., Bet At and Melia Hotels go up and down completely randomly.
Pair Corralation between Bet At and Melia Hotels
Assuming the 90 days trading horizon Bet At is expected to generate 17.19 times less return on investment than Melia Hotels. In addition to that, Bet At is 1.32 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 0.2 per unit of volatility. If you would invest 707.00 in Melia Hotels on September 20, 2024 and sell it today you would earn a total of 45.00 from holding Melia Hotels or generate 6.36% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
bet at home AG vs. Melia Hotels
Performance |
Timeline |
bet at home |
Melia Hotels |
Bet At and Melia Hotels Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bet At and Melia Hotels
The main advantage of trading using opposite Bet At and Melia Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bet At 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.Bet At vs. AMG Advanced Metallurgical | ||
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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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