Correlation Between Meli Hotels and Gateway Real
Can any of the company-specific risk be diversified away by investing in both Meli Hotels and Gateway Real 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 Meli Hotels and Gateway Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Meli Hotels International and Gateway Real Estate, you can compare the effects of market volatilities on Meli Hotels and Gateway Real 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 Meli Hotels with a short position of Gateway Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meli Hotels and Gateway Real.
Diversification Opportunities for Meli Hotels and Gateway Real
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Meli and Gateway is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Meli Hotels International and Gateway Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gateway Real Estate and Meli Hotels 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 Meli Hotels International are associated (or correlated) with Gateway Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gateway Real Estate has no effect on the direction of Meli Hotels i.e., Meli Hotels and Gateway Real go up and down completely randomly.
Pair Corralation between Meli Hotels and Gateway Real
Assuming the 90 days horizon Meli Hotels International is expected to generate 0.26 times more return on investment than Gateway Real. However, Meli Hotels International is 3.82 times less risky than Gateway Real. It trades about 0.1 of its potential returns per unit of risk. Gateway Real Estate is currently generating about -0.15 per unit of risk. If you would invest 656.00 in Meli Hotels International on September 23, 2024 and sell it today you would earn a total of 70.00 from holding Meli Hotels International or generate 10.67% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Meli Hotels International vs. Gateway Real Estate
Performance |
Timeline |
Meli Hotels International |
Gateway Real Estate |
Meli Hotels and Gateway Real Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Meli Hotels and Gateway Real
The main advantage of trading using opposite Meli Hotels and Gateway Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meli Hotels position performs unexpectedly, Gateway Real 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 Gateway Real will offset losses from the drop in Gateway Real's long position.Meli Hotels vs. APPLIED MATERIALS | Meli Hotels vs. The Yokohama Rubber | Meli Hotels vs. ECHO INVESTMENT ZY | Meli Hotels vs. New Residential Investment |
Gateway Real vs. Deutsche Wohnen SE | Gateway Real vs. Gateway Real Estate | Gateway Real vs. TIMES CHINA HLDGS | Gateway Real vs. LANDSEA HOMES P |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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