Correlation Between Meliá Hotels and LOANDEPOT INC
Can any of the company-specific risk be diversified away by investing in both Meliá Hotels and LOANDEPOT INC 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 LOANDEPOT INC 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 LOANDEPOT INC A, you can compare the effects of market volatilities on Meliá Hotels and LOANDEPOT INC 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 LOANDEPOT INC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meliá Hotels and LOANDEPOT INC.
Diversification Opportunities for Meliá Hotels and LOANDEPOT INC
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Meliá and LOANDEPOT is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Meli Hotels International and LOANDEPOT INC A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LOANDEPOT INC A 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 LOANDEPOT INC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LOANDEPOT INC A has no effect on the direction of Meliá Hotels i.e., Meliá Hotels and LOANDEPOT INC go up and down completely randomly.
Pair Corralation between Meliá Hotels and LOANDEPOT INC
Assuming the 90 days horizon Meli Hotels International is expected to generate 0.35 times more return on investment than LOANDEPOT INC. However, Meli Hotels International is 2.86 times less risky than LOANDEPOT INC. It trades about -0.07 of its potential returns per unit of risk. LOANDEPOT INC A is currently generating about -0.12 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. LOANDEPOT INC A
Performance |
Timeline |
Meli Hotels International |
LOANDEPOT INC A |
Meliá Hotels and LOANDEPOT INC Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Meliá Hotels and LOANDEPOT INC
The main advantage of trading using opposite Meliá Hotels and LOANDEPOT INC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meliá Hotels position performs unexpectedly, LOANDEPOT INC 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 LOANDEPOT INC will offset losses from the drop in LOANDEPOT INC'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 |
LOANDEPOT INC vs. SCIENCE IN SPORT | LOANDEPOT INC vs. Tencent Music Entertainment | LOANDEPOT INC vs. Columbia Sportswear | LOANDEPOT INC vs. Ming Le Sports |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
Share Portfolio Track or share privately all of your investments from the convenience of any device | |
Fundamental Analysis View fundamental data based on most recent published financial statements | |
Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |