Correlation Between Creo Medical and Ashtead Technology
Can any of the company-specific risk be diversified away by investing in both Creo Medical and Ashtead Technology 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 Ashtead Technology 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 Ashtead Technology Holdings, you can compare the effects of market volatilities on Creo Medical and Ashtead Technology 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 Ashtead Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Creo Medical and Ashtead Technology.
Diversification Opportunities for Creo Medical and Ashtead Technology
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Creo and Ashtead is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Creo Medical Group and Ashtead Technology Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ashtead Technology 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 Ashtead Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ashtead Technology has no effect on the direction of Creo Medical i.e., Creo Medical and Ashtead Technology go up and down completely randomly.
Pair Corralation between Creo Medical and Ashtead Technology
Assuming the 90 days trading horizon Creo Medical Group is expected to under-perform the Ashtead Technology. In addition to that, Creo Medical is 1.41 times more volatile than Ashtead Technology Holdings. It trades about -0.48 of its total potential returns per unit of risk. Ashtead Technology Holdings is currently generating about -0.09 per unit of volatility. If you would invest 52,500 in Ashtead Technology Holdings on December 10, 2024 and sell it today you would lose (2,400) from holding Ashtead Technology Holdings or give up 4.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Creo Medical Group vs. Ashtead Technology Holdings
Performance |
| Timeline |
| Creo Medical Group |
| Ashtead Technology |
Creo Medical and Ashtead Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Creo Medical and Ashtead Technology
The main advantage of trading using opposite Creo Medical and Ashtead Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Creo Medical position performs unexpectedly, Ashtead Technology 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 Ashtead Technology will offset losses from the drop in Ashtead Technology's long position.| Creo Medical vs. Ion Beam Applications | Creo Medical vs. HCA Healthcare | Creo Medical vs. Eco Animal Health | Creo Medical vs. Bellevue Healthcare Trust |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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