Correlation Between Creo Medical and CleanTech Lithium
Can any of the company-specific risk be diversified away by investing in both Creo Medical and CleanTech Lithium 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 CleanTech Lithium 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 CleanTech Lithium plc, you can compare the effects of market volatilities on Creo Medical and CleanTech Lithium 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 CleanTech Lithium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Creo Medical and CleanTech Lithium.
Diversification Opportunities for Creo Medical and CleanTech Lithium
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Creo and CleanTech is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Creo Medical Group and CleanTech Lithium plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CleanTech Lithium 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 CleanTech Lithium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CleanTech Lithium plc has no effect on the direction of Creo Medical i.e., Creo Medical and CleanTech Lithium go up and down completely randomly.
Pair Corralation between Creo Medical and CleanTech Lithium
Assuming the 90 days trading horizon Creo Medical Group is expected to under-perform the CleanTech Lithium. But the stock apears to be less risky and, when comparing its historical volatility, Creo Medical Group is 2.12 times less risky than CleanTech Lithium. The stock trades about -0.34 of its potential returns per unit of risk. The CleanTech Lithium plc is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,750 in CleanTech Lithium plc on September 4, 2024 and sell it today you would earn a total of 100.00 from holding CleanTech Lithium plc or generate 5.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Creo Medical Group vs. CleanTech Lithium plc
Performance |
| Timeline |
| Creo Medical Group |
| CleanTech Lithium plc |
Creo Medical and CleanTech Lithium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Creo Medical and CleanTech Lithium
The main advantage of trading using opposite Creo Medical and CleanTech Lithium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Creo Medical position performs unexpectedly, CleanTech Lithium 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 CleanTech Lithium will offset losses from the drop in CleanTech Lithium'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 |
| CleanTech Lithium vs. Antofagasta PLC | CleanTech Lithium vs. Atalaya Mining | CleanTech Lithium vs. Ferrexpo PLC | CleanTech Lithium vs. Amaroq Minerals |
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 Stocks Directory module to find actively traded stocks across global markets.
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