Correlation Between CREO MEDICAL and STMicroelectronics
Can any of the company-specific risk be diversified away by investing in both CREO MEDICAL and STMicroelectronics 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 STMicroelectronics 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 STMicroelectronics NV, you can compare the effects of market volatilities on CREO MEDICAL and STMicroelectronics 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 STMicroelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of CREO MEDICAL and STMicroelectronics.
Diversification Opportunities for CREO MEDICAL and STMicroelectronics
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between CREO and STMicroelectronics is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding CREO MEDICAL GRP and STMicroelectronics NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STMicroelectronics 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 STMicroelectronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STMicroelectronics has no effect on the direction of CREO MEDICAL i.e., CREO MEDICAL and STMicroelectronics go up and down completely randomly.
Pair Corralation between CREO MEDICAL and STMicroelectronics
Assuming the 90 days horizon CREO MEDICAL GRP is expected to under-perform the STMicroelectronics. In addition to that, CREO MEDICAL is 1.38 times more volatile than STMicroelectronics NV. It trades about -0.06 of its total potential returns per unit of risk. STMicroelectronics NV is currently generating about 0.01 per unit of volatility. If you would invest 2,421 in STMicroelectronics NV on October 30, 2024 and sell it today you would earn a total of 2.00 from holding STMicroelectronics NV or generate 0.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CREO MEDICAL GRP vs. STMicroelectronics NV
Performance |
| Timeline |
| CREO MEDICAL GRP |
| STMicroelectronics |
CREO MEDICAL and STMicroelectronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CREO MEDICAL and STMicroelectronics
The main advantage of trading using opposite CREO MEDICAL and STMicroelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CREO MEDICAL position performs unexpectedly, STMicroelectronics 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 STMicroelectronics will offset losses from the drop in STMicroelectronics' long position.| CREO MEDICAL vs. Sanyo Chemical Industries | CREO MEDICAL vs. Jacquet Metal Service | CREO MEDICAL vs. DAIDO METAL TD | CREO MEDICAL vs. SIERRA METALS |
| STMicroelectronics vs. LANDSEA GREEN MANAGEMENT | STMicroelectronics vs. Easy Software AG | STMicroelectronics vs. Sunny Optical Technology | STMicroelectronics vs. Check Point Software |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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