Correlation Between European Metals and Creo Medical
Can any of the company-specific risk be diversified away by investing in both European Metals and Creo Medical 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 European Metals and Creo Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between European Metals Holdings and Creo Medical Group, you can compare the effects of market volatilities on European Metals and Creo Medical 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 European Metals with a short position of Creo Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of European Metals and Creo Medical.
Diversification Opportunities for European Metals and Creo Medical
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between European and Creo is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding European Metals Holdings and Creo Medical Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Creo Medical Group and European Metals 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 European Metals Holdings are associated (or correlated) with Creo Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Creo Medical Group has no effect on the direction of European Metals i.e., European Metals and Creo Medical go up and down completely randomly.
Pair Corralation between European Metals and Creo Medical
Assuming the 90 days trading horizon European Metals Holdings is expected to under-perform the Creo Medical. In addition to that, European Metals is 1.45 times more volatile than Creo Medical Group. It trades about -0.1 of its total potential returns per unit of risk. Creo Medical Group is currently generating about -0.07 per unit of volatility. If you would invest 3,275 in Creo Medical Group on September 14, 2024 and sell it today you would lose (1,587) from holding Creo Medical Group or give up 48.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.63% |
| Values | Daily Returns |
European Metals Holdings vs. Creo Medical Group
Performance |
| Timeline |
| European Metals Holdings |
| Creo Medical Group |
European Metals and Creo Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with European Metals and Creo Medical
The main advantage of trading using opposite European Metals and Creo Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if European Metals position performs unexpectedly, Creo Medical 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 Creo Medical will offset losses from the drop in Creo Medical's long position.| European Metals vs. Made Tech Group | European Metals vs. Ecclesiastical Insurance Office | European Metals vs. Concurrent Technologies Plc | European Metals vs. Roper Technologies |
| Creo Medical vs. Quadrise Plc | Creo Medical vs. ImmuPharma PLC | Creo Medical vs. Intuitive Investments Group | Creo Medical vs. European Metals Holdings |
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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