Correlation Between Meliá Hotels and Jupiter Fund
Can any of the company-specific risk be diversified away by investing in both Meliá Hotels and Jupiter Fund 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 Meliá Hotels and Jupiter Fund 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 Jupiter Fund Management, you can compare the effects of market volatilities on Meliá Hotels and Jupiter Fund 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 Meliá Hotels with a short position of Jupiter Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meliá Hotels and Jupiter Fund.
Diversification Opportunities for Meliá Hotels and Jupiter Fund
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Meliá and Jupiter is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Meli Hotels International and Jupiter Fund Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jupiter Fund Management and Meliá 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 Jupiter Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jupiter Fund Management has no effect on the direction of Meliá Hotels i.e., Meliá Hotels and Jupiter Fund go up and down completely randomly.
Pair Corralation between Meliá Hotels and Jupiter Fund
Assuming the 90 days horizon Meli Hotels International is expected to generate 0.57 times more return on investment than Jupiter Fund. However, Meli Hotels International is 1.76 times less risky than Jupiter Fund. It trades about -0.07 of its potential returns per unit of risk. Jupiter Fund Management is currently generating about -0.06 per unit of risk. If you would invest 729.00 in Meli Hotels International on December 28, 2024 and sell it today you would lose (53.00) from holding Meli Hotels International or give up 7.27% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Meli Hotels International vs. Jupiter Fund Management
Performance |
Timeline |
Meli Hotels International |
Jupiter Fund Management |
Meliá Hotels and Jupiter Fund Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Meliá Hotels and Jupiter Fund
The main advantage of trading using opposite Meliá Hotels and Jupiter Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meliá Hotels position performs unexpectedly, Jupiter Fund 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 Jupiter Fund will offset losses from the drop in Jupiter Fund's long position.Meliá Hotels vs. The Yokohama Rubber | Meliá Hotels vs. AIR PRODCHEMICALS | Meliá Hotels vs. Hyster Yale Materials Handling | Meliá Hotels vs. GOODYEAR T RUBBER |
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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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