Correlation Between Global Net and Creo Medical

Can any of the company-specific risk be diversified away by investing in both Global Net 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 Global Net and Creo Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Global Net Lease and Creo Medical Group, you can compare the effects of market volatilities on Global Net 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 Global Net with a short position of Creo Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Net and Creo Medical.

Diversification Opportunities for Global Net and Creo Medical

0.75

Correlation Coefficient

Global Net  Creo Medical

Poor diversification

The 3 months correlation between Global and Creo is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Global Net Lease 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 Global Net 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 Global Net Lease 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 Global Net i.e., Global Net and Creo Medical go up and down completely randomly.

Pair Corralation between Global Net and Creo Medical

Assuming the 90 days trading horizon Global Net Lease is expected to under-perform the Creo Medical. But the stock apears to be less risky and, when comparing its historical volatility, Global Net Lease is 2.88 times less risky than Creo Medical. The stock trades about -0.11 of its potential returns per unit of risk. The Creo Medical Group is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  1,675  in Creo Medical Group on September 17, 2024 and sell it today you would earn a total of  75.00  from holding Creo Medical Group or generate 4.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.45%
Values	Daily Returns

Global Net Lease  vs.  Creo Medical Group

Global Net Lease

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Global Net Lease has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Creo Medical Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Creo Medical Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Global Net and Creo Medical

The main advantage of trading using opposite Global Net and Creo Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Net 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.

The idea behind Global Net Lease and Creo Medical Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..