Correlation Between CREO MEDICAL and CHINA SOUTHN
Can any of the company-specific risk be diversified away by investing in both CREO MEDICAL and CHINA SOUTHN 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 CHINA SOUTHN 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 CHINA SOUTHN AIR H , you can compare the effects of market volatilities on CREO MEDICAL and CHINA SOUTHN 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 CHINA SOUTHN. Check out your portfolio center. Please also check ongoing floating volatility patterns of CREO MEDICAL and CHINA SOUTHN.
Diversification Opportunities for CREO MEDICAL and CHINA SOUTHN
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between CREO and CHINA is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding CREO MEDICAL GRP and CHINA SOUTHN AIR H in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHINA SOUTHN AIR 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 CHINA SOUTHN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHINA SOUTHN AIR has no effect on the direction of CREO MEDICAL i.e., CREO MEDICAL and CHINA SOUTHN go up and down completely randomly.
Pair Corralation between CREO MEDICAL and CHINA SOUTHN
Assuming the 90 days horizon CREO MEDICAL GRP is expected to generate 1.49 times more return on investment than CHINA SOUTHN. However, CREO MEDICAL is 1.49 times more volatile than CHINA SOUTHN AIR H . It trades about 0.02 of its potential returns per unit of risk. CHINA SOUTHN AIR H is currently generating about -0.01 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 Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CREO MEDICAL GRP vs. CHINA SOUTHN AIR H
Performance |
| Timeline |
| CREO MEDICAL GRP |
| CHINA SOUTHN AIR |
CREO MEDICAL and CHINA SOUTHN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CREO MEDICAL and CHINA SOUTHN
The main advantage of trading using opposite CREO MEDICAL and CHINA SOUTHN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CREO MEDICAL position performs unexpectedly, CHINA SOUTHN 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 CHINA SOUTHN will offset losses from the drop in CHINA SOUTHN's 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 |
| CHINA SOUTHN vs. TreeHouse Foods | CHINA SOUTHN vs. TITANIUM TRANSPORTGROUP | CHINA SOUTHN vs. GWILLI FOOD | CHINA SOUTHN vs. INDOFOOD AGRI RES |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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