Correlation Between Regions Financial and Meliá Hotels
Can any of the company-specific risk be diversified away by investing in both Regions Financial and Meliá Hotels 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 Regions Financial and Meliá Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Regions Financial and Meli Hotels International, you can compare the effects of market volatilities on Regions Financial and Meliá Hotels 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 Regions Financial with a short position of Meliá Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regions Financial and Meliá Hotels.
Diversification Opportunities for Regions Financial and Meliá Hotels
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Regions and Meliá is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Regions Financial and Meli Hotels International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meli Hotels International and Regions Financial 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 Regions Financial are associated (or correlated) with Meliá Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meli Hotels International has no effect on the direction of Regions Financial i.e., Regions Financial and Meliá Hotels go up and down completely randomly.
Pair Corralation between Regions Financial and Meliá Hotels
Assuming the 90 days horizon Regions Financial is expected to under-perform the Meliá Hotels. But the stock apears to be less risky and, when comparing its historical volatility, Regions Financial is 1.14 times less risky than Meliá Hotels. The stock trades about -0.12 of its potential returns per unit of risk. The Meli Hotels International is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 683.00 in Meli Hotels International on December 3, 2024 and sell it today you would earn a total of 22.00 from holding Meli Hotels International or generate 3.22% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Regions Financial vs. Meli Hotels International
Performance |
Timeline |
Regions Financial |
Meli Hotels International |
Regions Financial and Meliá Hotels Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Regions Financial and Meliá Hotels
The main advantage of trading using opposite Regions Financial and Meliá Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regions Financial position performs unexpectedly, Meliá Hotels 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 Meliá Hotels will offset losses from the drop in Meliá Hotels' long position.Regions Financial vs. EAGLE MATERIALS | Regions Financial vs. Nok Airlines PCL | Regions Financial vs. APPLIED MATERIALS | Regions Financial vs. SINGAPORE AIRLINES |
Meliá Hotels vs. CALTAGIRONE EDITORE | Meliá Hotels vs. United States Steel | Meliá Hotels vs. Renesas Electronics | Meliá Hotels vs. STORE ELECTRONIC |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Equity Valuation Check real value of public entities based on technical and fundamental data | |
Economic Indicators Top statistical indicators that provide insights into how an economy is performing |