Correlation Between Meliá Hotels and COSCIENS Biopharma

Can any of the company-specific risk be diversified away by investing in both Meliá Hotels and COSCIENS Biopharma 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 COSCIENS Biopharma 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 COSCIENS Biopharma, you can compare the effects of market volatilities on Meliá Hotels and COSCIENS Biopharma 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 COSCIENS Biopharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meliá Hotels and COSCIENS Biopharma.

Diversification Opportunities for Meliá Hotels and COSCIENS Biopharma

-0.27

Correlation Coefficient

Meliá Hotels  COSCIENS Biopharma

Very good diversification

The 3 months correlation between Meliá and COSCIENS is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Meli Hotels International and COSCIENS Biopharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COSCIENS Biopharma 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 COSCIENS Biopharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COSCIENS Biopharma has no effect on the direction of Meliá Hotels i.e., Meliá Hotels and COSCIENS Biopharma go up and down completely randomly.

Pair Corralation between Meliá Hotels and COSCIENS Biopharma

Assuming the 90 days horizon Meli Hotels International is expected to generate 0.39 times more return on investment than COSCIENS Biopharma. However, Meli Hotels International is 2.54 times less risky than COSCIENS Biopharma. It trades about -0.03 of its potential returns per unit of risk. COSCIENS Biopharma is currently generating about -0.06 per unit of risk. If you would invest  711.00  in Meli Hotels International on October 24, 2024 and sell it today you would lose (33.00) from holding Meli Hotels International or give up 4.64% of portfolio value over 90 days.

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

Meli Hotels International  vs.  COSCIENS Biopharma

Meli Hotels International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Meli Hotels International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Meliá Hotels is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

COSCIENS Biopharma

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days COSCIENS Biopharma has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Meliá Hotels and COSCIENS Biopharma

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

The idea behind Meli Hotels International and COSCIENS Biopharma 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.