Correlation Between CREO MEDICAL and East Japan
Can any of the company-specific risk be diversified away by investing in both CREO MEDICAL and East Japan 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 East Japan 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 East Japan Railway, you can compare the effects of market volatilities on CREO MEDICAL and East Japan 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 East Japan. Check out your portfolio center. Please also check ongoing floating volatility patterns of CREO MEDICAL and East Japan.
Diversification Opportunities for CREO MEDICAL and East Japan
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between CREO and East is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding CREO MEDICAL GRP and East Japan Railway in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on East Japan Railway 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 East Japan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of East Japan Railway has no effect on the direction of CREO MEDICAL i.e., CREO MEDICAL and East Japan go up and down completely randomly.
Pair Corralation between CREO MEDICAL and East Japan
Assuming the 90 days horizon CREO MEDICAL GRP is expected to under-perform the East Japan. In addition to that, CREO MEDICAL is 2.43 times more volatile than East Japan Railway. It trades about -0.13 of its total potential returns per unit of risk. East Japan Railway is currently generating about 0.04 per unit of volatility. If you would invest 1,690 in East Japan Railway on November 3, 2024 and sell it today you would earn a total of 14.00 from holding East Japan Railway or generate 0.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CREO MEDICAL GRP vs. East Japan Railway
Performance |
| Timeline |
| CREO MEDICAL GRP |
| East Japan Railway |
CREO MEDICAL and East Japan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CREO MEDICAL and East Japan
The main advantage of trading using opposite CREO MEDICAL and East Japan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CREO MEDICAL position performs unexpectedly, East Japan 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 East Japan will offset losses from the drop in East Japan's long position.| CREO MEDICAL vs. Scottish Mortgage Investment | CREO MEDICAL vs. BOSTON BEER A | CREO MEDICAL vs. HK Electric Investments | CREO MEDICAL vs. CHRYSALIS INVESTMENTS LTD |
| East Japan vs. Coffee Holding Co | East Japan vs. Transport International Holdings | East Japan vs. GOLD ROAD RES | East Japan vs. Air Transport Services |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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