Correlation Between MeVis Medical and Marriott International

Can any of the company-specific risk be diversified away by investing in both MeVis Medical and Marriott International 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 MeVis Medical and Marriott International into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between MeVis Medical Solutions and Marriott International, you can compare the effects of market volatilities on MeVis Medical and Marriott International 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 MeVis Medical with a short position of Marriott International. Check out your portfolio center. Please also check ongoing floating volatility patterns of MeVis Medical and Marriott International.

Diversification Opportunities for MeVis Medical and Marriott International

-0.4

Correlation Coefficient

MeVis Medical  Marriott International

Very good diversification

The 3 months correlation between MeVis and Marriott is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding MeVis Medical Solutions and Marriott International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marriott International and MeVis Medical 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 MeVis Medical Solutions are associated (or correlated) with Marriott International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marriott International has no effect on the direction of MeVis Medical i.e., MeVis Medical and Marriott International go up and down completely randomly.

Pair Corralation between MeVis Medical and Marriott International

Assuming the 90 days trading horizon MeVis Medical Solutions is expected to under-perform the Marriott International. But the stock apears to be less risky and, when comparing its historical volatility, MeVis Medical Solutions is 1.85 times less risky than Marriott International. The stock trades about -0.08 of its potential returns per unit of risk. The Marriott International is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  19,052  in Marriott International on April 20, 2025 and sell it today you would earn a total of  4,313  from holding Marriott International or generate 22.64% return on investment over 90 days.

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

MeVis Medical Solutions  vs.  Marriott International

MeVis Medical Solutions

Risk-Adjusted Performance

Very Weak

Over the last 90 days MeVis Medical Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, MeVis Medical is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Marriott International

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Marriott International are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Marriott International reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MeVis Medical and Marriott International

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

The idea behind MeVis Medical Solutions and Marriott International 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.