Correlation Between Discover Financial and Creo Medical
Can any of the company-specific risk be diversified away by investing in both Discover Financial and Creo Medical 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 Discover Financial and Creo Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Discover Financial Services and Creo Medical Group, you can compare the effects of market volatilities on Discover Financial and Creo Medical 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 Discover Financial with a short position of Creo Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Discover Financial and Creo Medical.
Diversification Opportunities for Discover Financial and Creo Medical
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Discover and Creo is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Discover Financial Services and Creo Medical Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Creo Medical Group and Discover 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 Discover Financial Services are associated (or correlated) with Creo Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Creo Medical Group has no effect on the direction of Discover Financial i.e., Discover Financial and Creo Medical go up and down completely randomly.
Pair Corralation between Discover Financial and Creo Medical
Assuming the 90 days trading horizon Discover Financial Services is expected to generate 0.55 times more return on investment than Creo Medical. However, Discover Financial Services is 1.81 times less risky than Creo Medical. It trades about 0.07 of its potential returns per unit of risk. Creo Medical Group is currently generating about -0.02 per unit of risk. If you would invest 9,952 in Discover Financial Services on August 30, 2024 and sell it today you would earn a total of 8,230 from holding Discover Financial Services or generate 82.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.37% |
| Values | Daily Returns |
Discover Financial Services vs. Creo Medical Group
Performance |
| Timeline |
| Discover Financial |
| Creo Medical Group |
Discover Financial and Creo Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Discover Financial and Creo Medical
The main advantage of trading using opposite Discover Financial and Creo Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Discover Financial position performs unexpectedly, Creo Medical 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 Creo Medical will offset losses from the drop in Creo Medical's long position.| Discover Financial vs. Lendinvest PLC | Discover Financial vs. Neometals | Discover Financial vs. Albion Technology General | Discover Financial vs. Jupiter Fund Management |
| Creo Medical vs. Samsung Electronics Co | Creo Medical vs. Samsung Electronics Co | Creo Medical vs. Hyundai Motor | Creo Medical vs. Toyota Motor 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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