Correlation Between Creo Medical and Argentex Group
Can any of the company-specific risk be diversified away by investing in both Creo Medical and Argentex Group 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 Argentex Group 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 Argentex Group PLC, you can compare the effects of market volatilities on Creo Medical and Argentex Group 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 Argentex Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Creo Medical and Argentex Group.
Diversification Opportunities for Creo Medical and Argentex Group
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Creo and Argentex is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Creo Medical Group and Argentex Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Argentex Group PLC 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 Argentex Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Argentex Group PLC has no effect on the direction of Creo Medical i.e., Creo Medical and Argentex Group go up and down completely randomly.
Pair Corralation between Creo Medical and Argentex Group
Assuming the 90 days trading horizon Creo Medical Group is expected to under-perform the Argentex Group. But the stock apears to be less risky and, when comparing its historical volatility, Creo Medical Group is 1.48 times less risky than Argentex Group. The stock trades about -0.11 of its potential returns per unit of risk. The Argentex Group PLC is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 7,810 in Argentex Group PLC on September 4, 2024 and sell it today you would lose (4,810) from holding Argentex Group PLC or give up 61.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Creo Medical Group vs. Argentex Group PLC
Performance |
| Timeline |
| Creo Medical Group |
| Argentex Group PLC |
Creo Medical and Argentex Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Creo Medical and Argentex Group
The main advantage of trading using opposite Creo Medical and Argentex Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Creo Medical position performs unexpectedly, Argentex Group 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 Argentex Group will offset losses from the drop in Argentex Group's long position.| Creo Medical vs. Samsung Electronics Co | Creo Medical vs. Samsung Electronics Co | Creo Medical vs. Hyundai Motor | Creo Medical vs. Toyota Motor Corp |
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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