Correlation Between Meritage Hospitality and Ieh Corp

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

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

Diversification Opportunities for Meritage Hospitality and Ieh Corp

0.0

Correlation Coefficient

Meritage Hospitality  Ieh Corp

Pay attention - limited upside

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

Pair Corralation between Meritage Hospitality and Ieh Corp

If you would invest (100.00) in Meritage Hospitality Group on December 28, 2024 and sell it today you would earn a total of  100.00  from holding Meritage Hospitality Group or generate -100.0% return on investment over 90 days.

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

Meritage Hospitality Group  vs.  Ieh Corp

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.

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.

Pair Trading with Meritage Hospitality and Ieh Corp

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

The idea behind Meritage Hospitality Group and Ieh Corp 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.