Correlation Between Creotech Instruments and GI Group
Can any of the company-specific risk be diversified away by investing in both Creotech Instruments and GI Group 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 GI Group 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 GI Group Poland, you can compare the effects of market volatilities on Creotech Instruments and GI Group 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 GI Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Creotech Instruments and GI Group.
Diversification Opportunities for Creotech Instruments and GI Group
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Creotech and GIG is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Creotech Instruments SA and GI Group Poland in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GI Group Poland 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 GI Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GI Group Poland has no effect on the direction of Creotech Instruments i.e., Creotech Instruments and GI Group go up and down completely randomly.
Pair Corralation between Creotech Instruments and GI Group
Assuming the 90 days trading horizon Creotech Instruments SA is expected to under-perform the GI Group. In addition to that, Creotech Instruments is 1.9 times more volatile than GI Group Poland. It trades about -0.02 of its total potential returns per unit of risk. GI Group Poland is currently generating about 0.03 per unit of volatility. If you would invest 138.00 in GI Group Poland on September 3, 2024 and sell it today you would earn a total of 7.00 from holding GI Group Poland or generate 5.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Creotech Instruments SA vs. GI Group Poland
Performance |
| Timeline |
| Creotech Instruments |
| GI Group Poland |
Creotech Instruments and GI Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Creotech Instruments and GI Group
The main advantage of trading using opposite Creotech Instruments and GI Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Creotech Instruments position performs unexpectedly, GI Group 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 GI Group will offset losses from the drop in GI Group's long position.| Creotech Instruments vs. M Food SA | Creotech Instruments vs. Globe Trade Centre | Creotech Instruments vs. Quantum Software SA | Creotech Instruments vs. Marie Brizard Wine |
| GI Group vs. Gamedust SA | GI Group vs. Ultimate Games SA | GI Group vs. Creotech Instruments SA | GI Group vs. 3R Games SA |
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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