Correlation Between CREO MEDICAL and MACOM Technology
Can any of the company-specific risk be diversified away by investing in both CREO MEDICAL and MACOM Technology 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 CREO MEDICAL and MACOM Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CREO MEDICAL GRP and MACOM Technology Solutions, you can compare the effects of market volatilities on CREO MEDICAL and MACOM Technology 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 CREO MEDICAL with a short position of MACOM Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of CREO MEDICAL and MACOM Technology.
Diversification Opportunities for CREO MEDICAL and MACOM Technology
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CREO and MACOM is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding CREO MEDICAL GRP and MACOM Technology Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MACOM Technology Sol and CREO 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 CREO MEDICAL GRP are associated (or correlated) with MACOM Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MACOM Technology Sol has no effect on the direction of CREO MEDICAL i.e., CREO MEDICAL and MACOM Technology go up and down completely randomly.
Pair Corralation between CREO MEDICAL and MACOM Technology
Assuming the 90 days horizon CREO MEDICAL GRP is expected to generate 2.31 times more return on investment than MACOM Technology. However, CREO MEDICAL is 2.31 times more volatile than MACOM Technology Solutions. It trades about 0.08 of its potential returns per unit of risk. MACOM Technology Solutions is currently generating about 0.11 per unit of risk. If you would invest 18.00 in CREO MEDICAL GRP on October 30, 2024 and sell it today you would earn a total of 2.00 from holding CREO MEDICAL GRP or generate 11.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CREO MEDICAL GRP vs. MACOM Technology Solutions
Performance |
| Timeline |
| CREO MEDICAL GRP |
| MACOM Technology Sol |
CREO MEDICAL and MACOM Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CREO MEDICAL and MACOM Technology
The main advantage of trading using opposite CREO MEDICAL and MACOM Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CREO MEDICAL position performs unexpectedly, MACOM Technology 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 MACOM Technology will offset losses from the drop in MACOM Technology's long position.| CREO MEDICAL vs. Sanyo Chemical Industries | CREO MEDICAL vs. Jacquet Metal Service | CREO MEDICAL vs. DAIDO METAL TD | CREO MEDICAL vs. SIERRA METALS |
| MACOM Technology vs. Kingdee International Software | MACOM Technology vs. Amkor Technology | MACOM Technology vs. Iridium Communications | MACOM Technology vs. Ribbon Communications |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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