Correlation Between Creo Medical and Lendinvest PLC
Can any of the company-specific risk be diversified away by investing in both Creo Medical and Lendinvest PLC 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 Lendinvest PLC 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 Lendinvest PLC, you can compare the effects of market volatilities on Creo Medical and Lendinvest PLC 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 Lendinvest PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Creo Medical and Lendinvest PLC.
Diversification Opportunities for Creo Medical and Lendinvest PLC
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Creo and Lendinvest is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Creo Medical Group and Lendinvest PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lendinvest 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 Lendinvest PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lendinvest PLC has no effect on the direction of Creo Medical i.e., Creo Medical and Lendinvest PLC go up and down completely randomly.
Pair Corralation between Creo Medical and Lendinvest PLC
Assuming the 90 days trading horizon Creo Medical Group is expected to under-perform the Lendinvest PLC. In addition to that, Creo Medical is 4.11 times more volatile than Lendinvest PLC. It trades about -0.07 of its total potential returns per unit of risk. Lendinvest PLC is currently generating about -0.18 per unit of volatility. If you would invest 2,650 in Lendinvest PLC on September 14, 2024 and sell it today you would lose (100.00) from holding Lendinvest PLC or give up 3.77% 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. Lendinvest PLC
Performance |
| Timeline |
| Creo Medical Group |
| Lendinvest PLC |
Creo Medical and Lendinvest PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Creo Medical and Lendinvest PLC
The main advantage of trading using opposite Creo Medical and Lendinvest PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Creo Medical position performs unexpectedly, Lendinvest PLC 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 Lendinvest PLC will offset losses from the drop in Lendinvest PLC's long position.| Creo Medical vs. Quadrise Plc | Creo Medical vs. ImmuPharma PLC | Creo Medical vs. Intuitive Investments Group | Creo Medical vs. European Metals Holdings |
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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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