Correlation Between Creative Medical and Seres Therapeutics
Can any of the company-specific risk be diversified away by investing in both Creative Medical and Seres Therapeutics 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 Creative Medical and Seres Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Creative Medical Technology and Seres Therapeutics, you can compare the effects of market volatilities on Creative Medical and Seres Therapeutics 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 Creative Medical with a short position of Seres Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Creative Medical and Seres Therapeutics.
Diversification Opportunities for Creative Medical and Seres Therapeutics
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Creative and Seres is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Creative Medical Technology and Seres Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seres Therapeutics and Creative 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 Creative Medical Technology are associated (or correlated) with Seres Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seres Therapeutics has no effect on the direction of Creative Medical i.e., Creative Medical and Seres Therapeutics go up and down completely randomly.
Pair Corralation between Creative Medical and Seres Therapeutics
Given the investment horizon of 90 days Creative Medical Technology is expected to under-perform the Seres Therapeutics. But the stock apears to be less risky and, when comparing its historical volatility, Creative Medical Technology is 2.06 times less risky than Seres Therapeutics. The stock trades about -0.31 of its potential returns per unit of risk. The Seres Therapeutics is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 81.00 in Seres Therapeutics on September 3, 2024 and sell it today you would earn a total of 17.00 from holding Seres Therapeutics or generate 20.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Creative Medical Technology vs. Seres Therapeutics
Performance |
| Timeline |
| Creative Medical Tec |
| Seres Therapeutics |
Creative Medical and Seres Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Creative Medical and Seres Therapeutics
The main advantage of trading using opposite Creative Medical and Seres Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Creative Medical position performs unexpectedly, Seres Therapeutics 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 Seres Therapeutics will offset losses from the drop in Seres Therapeutics' long position.| Creative Medical vs. DiaMedica Therapeutics | Creative Medical vs. Lyra Therapeutics | Creative Medical vs. Centessa Pharmaceuticals PLC |
| Seres Therapeutics vs. DiaMedica Therapeutics | Seres Therapeutics vs. Lyra Therapeutics | Seres Therapeutics vs. Centessa Pharmaceuticals PLC |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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