Correlation Between CREO MEDICAL and Ross Stores
Can any of the company-specific risk be diversified away by investing in both CREO MEDICAL and Ross Stores 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 Ross Stores 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 Ross Stores, you can compare the effects of market volatilities on CREO MEDICAL and Ross Stores 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 Ross Stores. Check out your portfolio center. Please also check ongoing floating volatility patterns of CREO MEDICAL and Ross Stores.
Diversification Opportunities for CREO MEDICAL and Ross Stores
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CREO and Ross is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding CREO MEDICAL GRP and Ross Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ross Stores 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 Ross Stores. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ross Stores has no effect on the direction of CREO MEDICAL i.e., CREO MEDICAL and Ross Stores go up and down completely randomly.
Pair Corralation between CREO MEDICAL and Ross Stores
Assuming the 90 days horizon CREO MEDICAL GRP is expected to under-perform the Ross Stores. In addition to that, CREO MEDICAL is 2.48 times more volatile than Ross Stores. It trades about -0.13 of its total potential returns per unit of risk. Ross Stores is currently generating about -0.22 per unit of volatility. If you would invest 14,952 in Ross Stores on November 7, 2024 and sell it today you would lose (858.00) from holding Ross Stores or give up 5.74% 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. Ross Stores
Performance |
| Timeline |
| CREO MEDICAL GRP |
| Ross Stores |
CREO MEDICAL and Ross Stores Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CREO MEDICAL and Ross Stores
The main advantage of trading using opposite CREO MEDICAL and Ross Stores positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CREO MEDICAL position performs unexpectedly, Ross Stores 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 Ross Stores will offset losses from the drop in Ross Stores' long position.| CREO MEDICAL vs. Fuji Media Holdings | CREO MEDICAL vs. PROSIEBENSAT1 MEDIADR4 | CREO MEDICAL vs. Prosiebensat 1 Media | CREO MEDICAL vs. Nexstar Media Group |
| Ross Stores vs. CITIC Telecom International | Ross Stores vs. China Communications Services | Ross Stores vs. Citic Telecom International | Ross Stores vs. Mitsui Chemicals |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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