Correlation Between CREO MEDICAL and Major Drilling
Can any of the company-specific risk be diversified away by investing in both CREO MEDICAL and Major Drilling 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 Major Drilling 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 Major Drilling Group, you can compare the effects of market volatilities on CREO MEDICAL and Major Drilling 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 Major Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of CREO MEDICAL and Major Drilling.
Diversification Opportunities for CREO MEDICAL and Major Drilling
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CREO and Major is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding CREO MEDICAL GRP and Major Drilling Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Major Drilling Group 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 Major Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Major Drilling Group has no effect on the direction of CREO MEDICAL i.e., CREO MEDICAL and Major Drilling go up and down completely randomly.
Pair Corralation between CREO MEDICAL and Major Drilling
Assuming the 90 days horizon CREO MEDICAL GRP is expected to under-perform the Major Drilling. In addition to that, CREO MEDICAL is 1.43 times more volatile than Major Drilling Group. It trades about -0.16 of its total potential returns per unit of risk. Major Drilling Group is currently generating about 0.1 per unit of volatility. If you would invest 550.00 in Major Drilling Group on November 7, 2024 and sell it today you would earn a total of 20.00 from holding Major Drilling Group or generate 3.64% 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. Major Drilling Group
Performance |
| Timeline |
| CREO MEDICAL GRP |
| Major Drilling Group |
CREO MEDICAL and Major Drilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CREO MEDICAL and Major Drilling
The main advantage of trading using opposite CREO MEDICAL and Major Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CREO MEDICAL position performs unexpectedly, Major Drilling 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 Major Drilling will offset losses from the drop in Major Drilling's long position.| CREO MEDICAL vs. China Communications Services | CREO MEDICAL vs. Rocket Internet SE | CREO MEDICAL vs. Nok Airlines PCL | CREO MEDICAL vs. Highlight Communications AG |
| Major Drilling vs. BHP Group Limited | Major Drilling vs. Rio Tinto Group | Major Drilling vs. Vale SA | Major Drilling vs. Vale SA |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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