Correlation Between CREO MEDICAL and SWISS WATER
Can any of the company-specific risk be diversified away by investing in both CREO MEDICAL and SWISS WATER 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 SWISS WATER 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 SWISS WATER DECAFFCOFFEE, you can compare the effects of market volatilities on CREO MEDICAL and SWISS WATER 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 SWISS WATER. Check out your portfolio center. Please also check ongoing floating volatility patterns of CREO MEDICAL and SWISS WATER.
Diversification Opportunities for CREO MEDICAL and SWISS WATER
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CREO and SWISS is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding CREO MEDICAL GRP and SWISS WATER DECAFFCOFFEE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SWISS WATER DECAFFCOFFEE 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 SWISS WATER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SWISS WATER DECAFFCOFFEE has no effect on the direction of CREO MEDICAL i.e., CREO MEDICAL and SWISS WATER go up and down completely randomly.
Pair Corralation between CREO MEDICAL and SWISS WATER
Assuming the 90 days horizon CREO MEDICAL GRP is expected to generate 1.77 times more return on investment than SWISS WATER. However, CREO MEDICAL is 1.77 times more volatile than SWISS WATER DECAFFCOFFEE. It trades about 0.02 of its potential returns per unit of risk. SWISS WATER DECAFFCOFFEE is currently generating about 0.02 per unit of risk. If you would invest 22.00 in CREO MEDICAL GRP on October 14, 2024 and sell it today you would lose (1.00) from holding CREO MEDICAL GRP or give up 4.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CREO MEDICAL GRP vs. SWISS WATER DECAFFCOFFEE
Performance |
| Timeline |
| CREO MEDICAL GRP |
| SWISS WATER DECAFFCOFFEE |
CREO MEDICAL and SWISS WATER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CREO MEDICAL and SWISS WATER
The main advantage of trading using opposite CREO MEDICAL and SWISS WATER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CREO MEDICAL position performs unexpectedly, SWISS WATER 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 SWISS WATER will offset losses from the drop in SWISS WATER's long position.| CREO MEDICAL vs. Apple Inc | CREO MEDICAL vs. Apple Inc | CREO MEDICAL vs. Apple Inc | CREO MEDICAL vs. Apple Inc |
| SWISS WATER vs. Choice Hotels International | SWISS WATER vs. MELIA HOTELS | SWISS WATER vs. NH HOTEL GROUP | SWISS WATER vs. InterContinental Hotels Group |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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