Correlation Between Creotech Instruments and M Food
Can any of the company-specific risk be diversified away by investing in both Creotech Instruments and M Food 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 M Food 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 M Food SA, you can compare the effects of market volatilities on Creotech Instruments and M Food 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 M Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Creotech Instruments and M Food.
Diversification Opportunities for Creotech Instruments and M Food
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Creotech and MFD is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Creotech Instruments SA and M Food SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on M Food 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 M Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of M Food SA has no effect on the direction of Creotech Instruments i.e., Creotech Instruments and M Food go up and down completely randomly.
Pair Corralation between Creotech Instruments and M Food
Assuming the 90 days trading horizon Creotech Instruments SA is expected to generate 0.7 times more return on investment than M Food. However, Creotech Instruments SA is 1.43 times less risky than M Food. It trades about -0.15 of its potential returns per unit of risk. M Food SA is currently generating about -0.12 per unit of risk. If you would invest 15,200 in Creotech Instruments SA on September 4, 2024 and sell it today you would lose (700.00) from holding Creotech Instruments SA or give up 4.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 47.62% |
| Values | Daily Returns |
Creotech Instruments SA vs. M Food SA
Performance |
| Timeline |
| Creotech Instruments |
| M Food SA |
Creotech Instruments and M Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Creotech Instruments and M Food
The main advantage of trading using opposite Creotech Instruments and M Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Creotech Instruments position performs unexpectedly, M Food 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 M Food will offset losses from the drop in M Food's long position.| Creotech Instruments vs. Action SA | Creotech Instruments vs. Vercom SA | Creotech Instruments vs. CFI Holding SA | Creotech Instruments vs. Gobarto SA |
| M Food vs. Asseco Business Solutions | M Food vs. Kogeneracja SA | M Food vs. Asseco South Eastern | M Food vs. Movie 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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