Correlation Between LBG Media and Creo Medical
Can any of the company-specific risk be diversified away by investing in both LBG Media 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 LBG Media and Creo Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LBG Media PLC and Creo Medical Group, you can compare the effects of market volatilities on LBG Media 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 LBG Media with a short position of Creo Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of LBG Media and Creo Medical.
Diversification Opportunities for LBG Media and Creo Medical
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between LBG and Creo is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding LBG Media PLC 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 LBG Media 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 LBG Media PLC 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 LBG Media i.e., LBG Media and Creo Medical go up and down completely randomly.
Pair Corralation between LBG Media and Creo Medical
Assuming the 90 days trading horizon LBG Media PLC is expected to generate 0.63 times more return on investment than Creo Medical. However, LBG Media PLC is 1.59 times less risky than Creo Medical. It trades about -0.07 of its potential returns per unit of risk. Creo Medical Group is currently generating about -0.11 per unit of risk. If you would invest 12,700 in LBG Media PLC on November 7, 2024 and sell it today you would lose (300.00) from holding LBG Media PLC or give up 2.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
LBG Media PLC vs. Creo Medical Group
Performance |
| Timeline |
| LBG Media PLC |
| Creo Medical Group |
LBG Media and Creo Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LBG Media and Creo Medical
The main advantage of trading using opposite LBG Media and Creo Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LBG Media 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.| LBG Media vs. Public Storage | LBG Media vs. Wyndham Hotels Resorts | LBG Media vs. Wizz Air Holdings | LBG Media vs. Delta Air Lines |
| Creo Medical vs. Medical Properties Trust | Creo Medical vs. Porvair plc | Creo Medical vs. National Beverage Corp | Creo Medical vs. Ecofin Global Utilities |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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