Correlation Between Avon Protection and Creo Medical
Can any of the company-specific risk be diversified away by investing in both Avon Protection and Creo Medical 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 Avon Protection and Creo Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avon Protection PLC and Creo Medical Group, you can compare the effects of market volatilities on Avon Protection and Creo Medical 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 Avon Protection with a short position of Creo Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avon Protection and Creo Medical.
Diversification Opportunities for Avon Protection and Creo Medical
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Avon and Creo is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Avon Protection PLC and Creo Medical Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Creo Medical Group and Avon Protection 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 Avon Protection PLC are associated (or correlated) with Creo Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Creo Medical Group has no effect on the direction of Avon Protection i.e., Avon Protection and Creo Medical go up and down completely randomly.
Pair Corralation between Avon Protection and Creo Medical
Assuming the 90 days trading horizon Avon Protection PLC is expected to generate 0.34 times more return on investment than Creo Medical. However, Avon Protection PLC is 2.93 times less risky than Creo Medical. It trades about 0.36 of its potential returns per unit of risk. Creo Medical Group is currently generating about -0.11 per unit of risk. If you would invest 142,000 in Avon Protection PLC on October 24, 2024 and sell it today you would earn a total of 9,200 from holding Avon Protection PLC or generate 6.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Avon Protection PLC vs. Creo Medical Group
Performance |
| Timeline |
| Avon Protection PLC |
| Creo Medical Group |
Avon Protection and Creo Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avon Protection and Creo Medical
The main advantage of trading using opposite Avon Protection and Creo Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avon Protection position performs unexpectedly, Creo Medical 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 Creo Medical will offset losses from the drop in Creo Medical's long position.| Avon Protection vs. Tyson Foods Cl | Avon Protection vs. MoneysupermarketCom Group PLC | Avon Protection vs. UNIQA Insurance Group | Avon Protection vs. Berner Kantonalbank AG |
| Creo Medical vs. Hilton Food Group | Creo Medical vs. Melia Hotels | Creo Medical vs. Edita Food Industries | Creo Medical vs. InterContinental Hotels Group |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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