Correlation Between Creo Medical and Rockfire Resources
Can any of the company-specific risk be diversified away by investing in both Creo Medical and Rockfire Resources 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 Rockfire Resources 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 Rockfire Resources plc, you can compare the effects of market volatilities on Creo Medical and Rockfire Resources 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 Rockfire Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Creo Medical and Rockfire Resources.
Diversification Opportunities for Creo Medical and Rockfire Resources
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Creo and Rockfire is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Creo Medical Group and Rockfire Resources plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rockfire Resources 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 Rockfire Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rockfire Resources plc has no effect on the direction of Creo Medical i.e., Creo Medical and Rockfire Resources go up and down completely randomly.
Pair Corralation between Creo Medical and Rockfire Resources
Assuming the 90 days trading horizon Creo Medical Group is expected to under-perform the Rockfire Resources. But the stock apears to be less risky and, when comparing its historical volatility, Creo Medical Group is 1.83 times less risky than Rockfire Resources. The stock trades about -0.09 of its potential returns per unit of risk. The Rockfire Resources plc is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 21.00 in Rockfire Resources plc on September 2, 2024 and sell it today you would lose (10.00) from holding Rockfire Resources plc or give up 47.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Creo Medical Group vs. Rockfire Resources plc
Performance |
| Timeline |
| Creo Medical Group |
| Rockfire Resources plc |
Creo Medical and Rockfire Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Creo Medical and Rockfire Resources
The main advantage of trading using opposite Creo Medical and Rockfire Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Creo Medical position performs unexpectedly, Rockfire Resources 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 Rockfire Resources will offset losses from the drop in Rockfire Resources' long position.| Creo Medical vs. Pfeiffer Vacuum Technology | Creo Medical vs. Take Two Interactive Software | Creo Medical vs. Cizzle Biotechnology Holdings | Creo Medical vs. Batm Advanced Communications |
| Rockfire Resources vs. Ryanair Holdings plc | Rockfire Resources vs. Ecclesiastical Insurance Office | Rockfire Resources vs. Playtech Plc | Rockfire Resources vs. Flow Traders NV |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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