Correlation Between Creotech Instruments and 4Mass SA
Can any of the company-specific risk be diversified away by investing in both Creotech Instruments and 4Mass SA 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 Creotech Instruments and 4Mass SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Creotech Instruments SA and 4Mass SA, you can compare the effects of market volatilities on Creotech Instruments and 4Mass SA 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 Creotech Instruments with a short position of 4Mass SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Creotech Instruments and 4Mass SA.
Diversification Opportunities for Creotech Instruments and 4Mass SA
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Creotech and 4Mass is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Creotech Instruments SA and 4Mass SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 4Mass SA and Creotech Instruments 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 Creotech Instruments SA are associated (or correlated) with 4Mass SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 4Mass SA has no effect on the direction of Creotech Instruments i.e., Creotech Instruments and 4Mass SA go up and down completely randomly.
Pair Corralation between Creotech Instruments and 4Mass SA
Assuming the 90 days trading horizon Creotech Instruments SA is expected to under-perform the 4Mass SA. In addition to that, Creotech Instruments is 1.81 times more volatile than 4Mass SA. It trades about -0.03 of its total potential returns per unit of risk. 4Mass SA is currently generating about 0.05 per unit of volatility. If you would invest 595.00 in 4Mass SA on September 13, 2024 and sell it today you would earn a total of 55.00 from holding 4Mass SA or generate 9.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Creotech Instruments SA vs. 4Mass SA
Performance |
| Timeline |
| Creotech Instruments |
| 4Mass SA |
Creotech Instruments and 4Mass SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Creotech Instruments and 4Mass SA
The main advantage of trading using opposite Creotech Instruments and 4Mass SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Creotech Instruments position performs unexpectedly, 4Mass SA 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 4Mass SA will offset losses from the drop in 4Mass SA's long position.| Creotech Instruments vs. UniCredit SpA | Creotech Instruments vs. Movie Games SA | Creotech Instruments vs. Mlk Foods Public | Creotech Instruments vs. Alior Bank SA |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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