Correlation Between Catena Media and Creo Medical
Can any of the company-specific risk be diversified away by investing in both Catena Media 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 Catena Media and Creo Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Catena Media PLC and Creo Medical Group, you can compare the effects of market volatilities on Catena Media 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 Catena Media with a short position of Creo Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catena Media and Creo Medical.
Diversification Opportunities for Catena Media and Creo Medical
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Catena and Creo is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Catena Media PLC 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 Catena Media 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 Catena Media PLC 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 Catena Media i.e., Catena Media and Creo Medical go up and down completely randomly.
Pair Corralation between Catena Media and Creo Medical
Assuming the 90 days trading horizon Catena Media PLC is expected to generate 0.51 times more return on investment than Creo Medical. However, Catena Media PLC is 1.96 times less risky than Creo Medical. It trades about 0.02 of its potential returns per unit of risk. Creo Medical Group is currently generating about -0.11 per unit of risk. If you would invest 403.00 in Catena Media PLC on November 7, 2024 and sell it today you would earn a total of 2.00 from holding Catena Media PLC or generate 0.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Catena Media PLC vs. Creo Medical Group
Performance |
| Timeline |
| Catena Media PLC |
| Creo Medical Group |
Catena Media and Creo Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catena Media and Creo Medical
The main advantage of trading using opposite Catena Media and Creo Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catena Media 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.| Catena Media vs. Public Storage | Catena Media vs. Datalogic | Catena Media vs. BE Semiconductor Industries | Catena Media vs. Bloomsbury Publishing Plc |
| Creo Medical vs. Medical Properties Trust | Creo Medical vs. Porvair plc | Creo Medical vs. National Beverage Corp | Creo Medical vs. Ecofin Global Utilities |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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