Correlation Between Melia Hotels and Oryzon Genomics

Can any of the company-specific risk be diversified away by investing in both Melia Hotels and Oryzon Genomics 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 Melia Hotels and Oryzon Genomics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Melia Hotels and Oryzon Genomics SA, you can compare the effects of market volatilities on Melia Hotels and Oryzon Genomics 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 Melia Hotels with a short position of Oryzon Genomics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Melia Hotels and Oryzon Genomics.

Diversification Opportunities for Melia Hotels and Oryzon Genomics

0.16

Correlation Coefficient

Melia Hotels  Oryzon Genomics

Average diversification

The 3 months correlation between Melia and Oryzon is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Melia Hotels and Oryzon Genomics SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oryzon Genomics SA and Melia 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 Melia Hotels are associated (or correlated) with Oryzon Genomics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oryzon Genomics SA has no effect on the direction of Melia Hotels i.e., Melia Hotels and Oryzon Genomics go up and down completely randomly.

Pair Corralation between Melia Hotels and Oryzon Genomics

Assuming the 90 days trading horizon Melia Hotels is expected to under-perform the Oryzon Genomics. But the stock apears to be less risky and, when comparing its historical volatility, Melia Hotels is 1.73 times less risky than Oryzon Genomics. The stock trades about -0.13 of its potential returns per unit of risk. The Oryzon Genomics SA is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest  150.00  in Oryzon Genomics SA on October 27, 2024 and sell it today you would lose (6.00) from holding Oryzon Genomics SA or give up 4.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Melia Hotels  vs.  Oryzon Genomics SA

Melia Hotels

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Melia Hotels are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound essential indicators, Melia Hotels is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Oryzon Genomics SA

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Melia Hotels and Oryzon Genomics

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

The idea behind Melia Hotels and Oryzon Genomics SA 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.

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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..