Correlation Between Novina SA and Creotech Instruments
Can any of the company-specific risk be diversified away by investing in both Novina SA and Creotech Instruments 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 Novina SA and Creotech Instruments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Novina SA and Creotech Instruments SA, you can compare the effects of market volatilities on Novina SA and Creotech Instruments 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 Novina SA with a short position of Creotech Instruments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Novina SA and Creotech Instruments.
Diversification Opportunities for Novina SA and Creotech Instruments
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Novina and Creotech is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Novina SA and Creotech Instruments SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Creotech Instruments and Novina SA 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 Novina SA are associated (or correlated) with Creotech Instruments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Creotech Instruments has no effect on the direction of Novina SA i.e., Novina SA and Creotech Instruments go up and down completely randomly.
Pair Corralation between Novina SA and Creotech Instruments
Assuming the 90 days trading horizon Novina SA is expected to generate 2.42 times more return on investment than Creotech Instruments. However, Novina SA is 2.42 times more volatile than Creotech Instruments SA. It trades about 0.05 of its potential returns per unit of risk. Creotech Instruments SA is currently generating about 0.03 per unit of risk. If you would invest 67.00 in Novina SA on September 4, 2024 and sell it today you would earn a total of 46.00 from holding Novina SA or generate 68.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.38% |
| Values | Daily Returns |
Novina SA vs. Creotech Instruments SA
Performance |
| Timeline |
| Novina SA |
| Creotech Instruments |
Novina SA and Creotech Instruments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Novina SA and Creotech Instruments
The main advantage of trading using opposite Novina SA and Creotech Instruments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Novina SA position performs unexpectedly, Creotech Instruments 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 Creotech Instruments will offset losses from the drop in Creotech Instruments' long position.| Novina SA vs. SOFTWARE MANSION SPOLKA | Novina SA vs. Mercator Medical SA | Novina SA vs. Alior Bank SA | Novina SA vs. Intersport Polska SA |
| Creotech Instruments vs. Action SA | Creotech Instruments vs. Vercom SA | Creotech Instruments vs. CFI Holding SA | Creotech Instruments vs. Gobarto 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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