Correlation Between CREO MEDICAL and VARIOUS EATERIES
Can any of the company-specific risk be diversified away by investing in both CREO MEDICAL and VARIOUS EATERIES 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 VARIOUS EATERIES 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 VARIOUS EATERIES LS, you can compare the effects of market volatilities on CREO MEDICAL and VARIOUS EATERIES 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 VARIOUS EATERIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of CREO MEDICAL and VARIOUS EATERIES.
Diversification Opportunities for CREO MEDICAL and VARIOUS EATERIES
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between CREO and VARIOUS is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding CREO MEDICAL GRP and VARIOUS EATERIES LS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VARIOUS EATERIES 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 VARIOUS EATERIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VARIOUS EATERIES has no effect on the direction of CREO MEDICAL i.e., CREO MEDICAL and VARIOUS EATERIES go up and down completely randomly.
Pair Corralation between CREO MEDICAL and VARIOUS EATERIES
Assuming the 90 days horizon CREO MEDICAL GRP is expected to generate 2.05 times more return on investment than VARIOUS EATERIES. However, CREO MEDICAL is 2.05 times more volatile than VARIOUS EATERIES LS. It trades about 0.02 of its potential returns per unit of risk. VARIOUS EATERIES LS is currently generating about -0.04 per unit of risk. If you would invest 22.00 in CREO MEDICAL GRP on October 29, 2024 and sell it today you would lose (2.00) from holding CREO MEDICAL GRP or give up 9.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CREO MEDICAL GRP vs. VARIOUS EATERIES LS
Performance |
| Timeline |
| CREO MEDICAL GRP |
| VARIOUS EATERIES |
CREO MEDICAL and VARIOUS EATERIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CREO MEDICAL and VARIOUS EATERIES
The main advantage of trading using opposite CREO MEDICAL and VARIOUS EATERIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CREO MEDICAL position performs unexpectedly, VARIOUS EATERIES 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 VARIOUS EATERIES will offset losses from the drop in VARIOUS EATERIES's long position.| CREO MEDICAL vs. Apple Inc | CREO MEDICAL vs. Apple Inc | CREO MEDICAL vs. Apple Inc | CREO MEDICAL vs. Apple Inc |
| VARIOUS EATERIES vs. CHRYSALIS INVESTMENTS LTD | VARIOUS EATERIES vs. Scottish Mortgage Investment | VARIOUS EATERIES vs. Tokyu Construction Co | VARIOUS EATERIES vs. North American Construction |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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