Correlation Between Ieh Corp and Meritage Hospitality

Can any of the company-specific risk be diversified away by investing in both Ieh Corp and Meritage Hospitality 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 Ieh Corp and Meritage Hospitality into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ieh Corp and Meritage Hospitality Group, you can compare the effects of market volatilities on Ieh Corp and Meritage Hospitality 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 Ieh Corp with a short position of Meritage Hospitality. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ieh Corp and Meritage Hospitality.

Diversification Opportunities for Ieh Corp and Meritage Hospitality

0.0

Correlation Coefficient

Ieh Corp  Meritage Hospitality

Pay attention - limited upside

The 3 months correlation between Ieh and Meritage is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ieh Corp and Meritage Hospitality Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meritage Hospitality and Ieh Corp 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 Ieh Corp are associated (or correlated) with Meritage Hospitality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meritage Hospitality has no effect on the direction of Ieh Corp i.e., Ieh Corp and Meritage Hospitality go up and down completely randomly.

Pair Corralation between Ieh Corp and Meritage Hospitality

If you would invest  895.00  in Ieh Corp on December 2, 2024 and sell it today you would lose (111.00) from holding Ieh Corp or give up 12.4% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Ieh Corp  vs.  Meritage Hospitality Group

Ieh Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ieh Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's technical indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Meritage Hospitality

Risk-Adjusted Performance

Very Weak

Over the last 90 days Meritage Hospitality Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, Meritage Hospitality is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Ieh Corp and Meritage Hospitality

The main advantage of trading using opposite Ieh Corp and Meritage Hospitality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ieh Corp position performs unexpectedly, Meritage Hospitality 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 Meritage Hospitality will offset losses from the drop in Meritage Hospitality's long position.

The idea behind Ieh Corp and Meritage Hospitality Group 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.

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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.