Correlation Between Meliá Hotels and LOBO EV

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

Diversification Opportunities for Meliá Hotels and LOBO EV

-0.65

Correlation Coefficient

Meliá Hotels  LOBO EV

Excellent diversification

The 3 months correlation between Meliá and LOBO is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Meli Hotels International and LOBO EV TECHNOLOGIES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LOBO EV TECHNOLOGIES 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 LOBO EV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LOBO EV TECHNOLOGIES has no effect on the direction of Meliá Hotels i.e., Meliá Hotels and LOBO EV go up and down completely randomly.

Pair Corralation between Meliá Hotels and LOBO EV

Assuming the 90 days horizon Meli Hotels International is expected to under-perform the LOBO EV. But the pink sheet apears to be less risky and, when comparing its historical volatility, Meli Hotels International is 1.65 times less risky than LOBO EV. The pink sheet trades about -0.24 of its potential returns per unit of risk. The LOBO EV TECHNOLOGIES is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  184.00  in LOBO EV TECHNOLOGIES on October 26, 2024 and sell it today you would lose (14.00) from holding LOBO EV TECHNOLOGIES or give up 7.61% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	94.74%
Values	Daily Returns

Meli Hotels International  vs.  LOBO EV TECHNOLOGIES

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 newest stock price disturbance, may contribute to mid-run losses for the stockholders.

LOBO EV TECHNOLOGIES

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LOBO EV TECHNOLOGIES has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental drivers remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Meliá Hotels and LOBO EV

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

The idea behind Meli Hotels International and LOBO EV TECHNOLOGIES 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.