Correlation Between Creo Medical and Air Products
Can any of the company-specific risk be diversified away by investing in both Creo Medical and Air Products 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 Air Products 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 Air Products Chemicals, you can compare the effects of market volatilities on Creo Medical and Air Products 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 Air Products. Check out your portfolio center. Please also check ongoing floating volatility patterns of Creo Medical and Air Products.
Diversification Opportunities for Creo Medical and Air Products
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Creo and Air is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Creo Medical Group and Air Products Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Products Chemicals 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 Air Products. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Products Chemicals has no effect on the direction of Creo Medical i.e., Creo Medical and Air Products go up and down completely randomly.
Pair Corralation between Creo Medical and Air Products
Assuming the 90 days trading horizon Creo Medical Group is expected to under-perform the Air Products. In addition to that, Creo Medical is 1.95 times more volatile than Air Products Chemicals. It trades about -0.42 of its total potential returns per unit of risk. Air Products Chemicals is currently generating about 0.21 per unit of volatility. If you would invest 31,569 in Air Products Chemicals on August 30, 2024 and sell it today you would earn a total of 1,770 from holding Air Products Chemicals or generate 5.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Creo Medical Group vs. Air Products Chemicals
Performance |
| Timeline |
| Creo Medical Group |
| Air Products Chemicals |
Creo Medical and Air Products Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Creo Medical and Air Products
The main advantage of trading using opposite Creo Medical and Air Products positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Creo Medical position performs unexpectedly, Air Products 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 Air Products will offset losses from the drop in Air Products' long position.| Creo Medical vs. Verizon Communications | Creo Medical vs. Naturhouse Health SA | Creo Medical vs. Aeorema Communications Plc | Creo Medical vs. Zegona Communications Plc |
| Air Products vs. Tungsten West PLC | Air Products vs. Argo Group Limited | Air Products vs. Hardide PLC | Air Products vs. Versarien 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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