Correlation Between CREO MEDICAL and ALERION CLEANPOWER
Can any of the company-specific risk be diversified away by investing in both CREO MEDICAL and ALERION CLEANPOWER 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 ALERION CLEANPOWER 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 ALERION CLEANPOWER, you can compare the effects of market volatilities on CREO MEDICAL and ALERION CLEANPOWER 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 ALERION CLEANPOWER. Check out your portfolio center. Please also check ongoing floating volatility patterns of CREO MEDICAL and ALERION CLEANPOWER.
Diversification Opportunities for CREO MEDICAL and ALERION CLEANPOWER
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CREO and ALERION is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding CREO MEDICAL GRP and ALERION CLEANPOWER in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALERION CLEANPOWER 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 ALERION CLEANPOWER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALERION CLEANPOWER has no effect on the direction of CREO MEDICAL i.e., CREO MEDICAL and ALERION CLEANPOWER go up and down completely randomly.
Pair Corralation between CREO MEDICAL and ALERION CLEANPOWER
Assuming the 90 days horizon CREO MEDICAL GRP is expected to generate 1.71 times more return on investment than ALERION CLEANPOWER. However, CREO MEDICAL is 1.71 times more volatile than ALERION CLEANPOWER. It trades about -0.16 of its potential returns per unit of risk. ALERION CLEANPOWER is currently generating about -0.28 per unit of risk. If you would invest 22.00 in CREO MEDICAL GRP on November 6, 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CREO MEDICAL GRP vs. ALERION CLEANPOWER
Performance |
| Timeline |
| CREO MEDICAL GRP |
| ALERION CLEANPOWER |
CREO MEDICAL and ALERION CLEANPOWER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CREO MEDICAL and ALERION CLEANPOWER
The main advantage of trading using opposite CREO MEDICAL and ALERION CLEANPOWER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CREO MEDICAL position performs unexpectedly, ALERION CLEANPOWER 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 ALERION CLEANPOWER will offset losses from the drop in ALERION CLEANPOWER's long position.| CREO MEDICAL vs. SIVERS SEMICONDUCTORS AB | CREO MEDICAL vs. NorAm Drilling AS | CREO MEDICAL vs. Volkswagen AG | CREO MEDICAL vs. Darden Restaurants |
| ALERION CLEANPOWER vs. China Communications Services | ALERION CLEANPOWER vs. COMPUTERSHARE | ALERION CLEANPOWER vs. Spirent Communications plc | ALERION CLEANPOWER vs. GRUPO CARSO A1 |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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