Correlation Between Creo Medical and British American
Can any of the company-specific risk be diversified away by investing in both Creo Medical and British American 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 British American into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Creo Medical Group and British American Tobacco, you can compare the effects of market volatilities on Creo Medical and British American 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 British American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Creo Medical and British American.
Diversification Opportunities for Creo Medical and British American
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Creo and British is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Creo Medical Group and British American Tobacco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on British American Tobacco 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 Group are associated (or correlated) with British American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of British American Tobacco has no effect on the direction of Creo Medical i.e., Creo Medical and British American go up and down completely randomly.
Pair Corralation between Creo Medical and British American
Assuming the 90 days trading horizon Creo Medical Group is expected to generate 4.85 times more return on investment than British American. However, Creo Medical is 4.85 times more volatile than British American Tobacco. It trades about 0.35 of its potential returns per unit of risk. British American Tobacco is currently generating about -0.07 per unit of risk. If you would invest 1,425 in Creo Medical Group on October 11, 2024 and sell it today you would earn a total of 550.00 from holding Creo Medical Group or generate 38.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Creo Medical Group vs. British American Tobacco
Performance |
| Timeline |
| Creo Medical Group |
| British American Tobacco |
Creo Medical and British American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Creo Medical and British American
The main advantage of trading using opposite Creo Medical and British American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Creo Medical position performs unexpectedly, British American 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 British American will offset losses from the drop in British American's long position.| Creo Medical vs. Cognizant Technology Solutions | Creo Medical vs. Ross Stores | Creo Medical vs. Sunny Optical Technology | Creo Medical vs. Vitec Software Group |
| British American vs. Creo Medical Group | British American vs. STMicroelectronics NV | British American vs. Zoom Video Communications | British American vs. Cairo Communication SpA |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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