Correlation Between Creo Medical and BW Offshore
Can any of the company-specific risk be diversified away by investing in both Creo Medical and BW Offshore 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 BW Offshore 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 BW Offshore, you can compare the effects of market volatilities on Creo Medical and BW Offshore 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 BW Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Creo Medical and BW Offshore.
Diversification Opportunities for Creo Medical and BW Offshore
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Creo and 0RKH is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Creo Medical Group and BW Offshore in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BW Offshore 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 BW Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BW Offshore has no effect on the direction of Creo Medical i.e., Creo Medical and BW Offshore go up and down completely randomly.
Pair Corralation between Creo Medical and BW Offshore
Assuming the 90 days trading horizon Creo Medical is expected to generate 1.97 times less return on investment than BW Offshore. In addition to that, Creo Medical is 1.55 times more volatile than BW Offshore. It trades about 0.01 of its total potential returns per unit of risk. BW Offshore is currently generating about 0.04 per unit of volatility. If you would invest 2,135 in BW Offshore on October 7, 2024 and sell it today you would earn a total of 1,038 from holding BW Offshore or generate 48.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.6% |
| Values | Daily Returns |
Creo Medical Group vs. BW Offshore
Performance |
| Timeline |
| Creo Medical Group |
| BW Offshore |
Creo Medical and BW Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Creo Medical and BW Offshore
The main advantage of trading using opposite Creo Medical and BW Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Creo Medical position performs unexpectedly, BW Offshore 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 BW Offshore will offset losses from the drop in BW Offshore's long position.| Creo Medical vs. Samsung Electronics Co | Creo Medical vs. Samsung Electronics Co | Creo Medical vs. Toyota Motor Corp | Creo Medical vs. Reliance Industries Ltd |
| BW Offshore vs. Grand Vision Media | BW Offshore vs. XLMedia PLC | BW Offshore vs. MediaZest plc | BW Offshore vs. New Residential Investment |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |