Correlation Between Meli Hotels and CITIC
Can any of the company-specific risk be diversified away by investing in both Meli Hotels and CITIC 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 Meli Hotels and CITIC 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 CITIC LTD ADR5, you can compare the effects of market volatilities on Meli Hotels and CITIC 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 Meli Hotels with a short position of CITIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meli Hotels and CITIC.
Diversification Opportunities for Meli Hotels and CITIC
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Meli and CITIC is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Meli Hotels International and CITIC LTD ADR5 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CITIC LTD ADR5 and Meli 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 CITIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CITIC LTD ADR5 has no effect on the direction of Meli Hotels i.e., Meli Hotels and CITIC go up and down completely randomly.
Pair Corralation between Meli Hotels and CITIC
Assuming the 90 days horizon Meli Hotels International is expected to generate 1.14 times more return on investment than CITIC. However, Meli Hotels is 1.14 times more volatile than CITIC LTD ADR5. It trades about 0.23 of its potential returns per unit of risk. CITIC LTD ADR5 is currently generating about 0.25 per unit of risk. If you would invest 608.00 in Meli Hotels International on April 24, 2025 and sell it today you would earn a total of 145.00 from holding Meli Hotels International or generate 23.85% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Meli Hotels International vs. CITIC LTD ADR5
Performance |
Timeline |
Meli Hotels International |
CITIC LTD ADR5 |
Meli Hotels and CITIC Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Meli Hotels and CITIC
The main advantage of trading using opposite Meli Hotels and CITIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meli Hotels position performs unexpectedly, CITIC 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 CITIC will offset losses from the drop in CITIC's long position.Meli Hotels vs. Costco Wholesale Corp | Meli Hotels vs. STMICROELECTRONICS | Meli Hotels vs. Delta Electronics Public | Meli Hotels vs. Renesas Electronics |
CITIC vs. Meli Hotels International | CITIC vs. Pebblebrook Hotel Trust | CITIC vs. TYSNES SPAREBANK NK | CITIC vs. Synovus Financial Corp |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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