Correlation Between Amica SA and Creotech Instruments
Can any of the company-specific risk be diversified away by investing in both Amica SA and Creotech Instruments 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 Amica SA and Creotech Instruments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amica SA and Creotech Instruments SA, you can compare the effects of market volatilities on Amica SA and Creotech Instruments 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 Amica SA with a short position of Creotech Instruments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amica SA and Creotech Instruments.
Diversification Opportunities for Amica SA and Creotech Instruments
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Amica and Creotech is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Amica SA and Creotech Instruments SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Creotech Instruments and Amica SA 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 Amica SA are associated (or correlated) with Creotech Instruments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Creotech Instruments has no effect on the direction of Amica SA i.e., Amica SA and Creotech Instruments go up and down completely randomly.
Pair Corralation between Amica SA and Creotech Instruments
Assuming the 90 days trading horizon Amica SA is expected to generate 1.22 times more return on investment than Creotech Instruments. However, Amica SA is 1.22 times more volatile than Creotech Instruments SA. It trades about 0.11 of its potential returns per unit of risk. Creotech Instruments SA is currently generating about -0.05 per unit of risk. If you would invest 5,800 in Amica SA on September 1, 2024 and sell it today you would earn a total of 250.00 from holding Amica SA or generate 4.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Amica SA vs. Creotech Instruments SA
Performance |
| Timeline |
| Amica SA |
| Creotech Instruments |
Amica SA and Creotech Instruments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amica SA and Creotech Instruments
The main advantage of trading using opposite Amica SA and Creotech Instruments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amica SA position performs unexpectedly, Creotech Instruments 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 Creotech Instruments will offset losses from the drop in Creotech Instruments' long position.| Amica SA vs. Echo Investment SA | Amica SA vs. Esotiq Henderson SA | Amica SA vs. Asseco Business Solutions | Amica SA vs. Detalion Games SA |
| Creotech Instruments vs. Asseco Business Solutions | Creotech Instruments vs. Detalion Games SA | Creotech Instruments vs. Asseco South Eastern | Creotech Instruments vs. CFI Holding SA |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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