Correlation Between CREO MEDICAL and Elis SA

Can any of the company-specific risk be diversified away by investing in both CREO MEDICAL and Elis SA 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 CREO MEDICAL and Elis SA into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CREO MEDICAL GRP and Elis SA, you can compare the effects of market volatilities on CREO MEDICAL and Elis SA 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 CREO MEDICAL with a short position of Elis SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of CREO MEDICAL and Elis SA.

Diversification Opportunities for CREO MEDICAL and Elis SA

0.36

Correlation Coefficient

CREO MEDICAL  Elis SA

Weak diversification

The 3 months correlation between CREO and Elis is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding CREO MEDICAL GRP and Elis SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elis SA and CREO MEDICAL 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 CREO MEDICAL GRP are associated (or correlated) with Elis SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elis SA has no effect on the direction of CREO MEDICAL i.e., CREO MEDICAL and Elis SA go up and down completely randomly.

Pair Corralation between CREO MEDICAL and Elis SA

Assuming the 90 days horizon CREO MEDICAL GRP is expected to generate 2.8 times more return on investment than Elis SA. However, CREO MEDICAL is 2.8 times more volatile than Elis SA. It trades about 0.02 of its potential returns per unit of risk. Elis SA is currently generating about 0.04 per unit of risk. If you would invest  22.00  in CREO MEDICAL GRP on October 24, 2024 and sell it today you would lose (3.00) from holding CREO MEDICAL GRP or give up 13.64% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

CREO MEDICAL GRP  vs.  Elis SA

CREO MEDICAL GRP

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CREO MEDICAL GRP has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Elis SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Elis SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Elis SA is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with CREO MEDICAL and Elis SA

The main advantage of trading using opposite CREO MEDICAL and Elis SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CREO MEDICAL position performs unexpectedly, Elis SA 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 Elis SA will offset losses from the drop in Elis SA's long position.

The idea behind CREO MEDICAL GRP and Elis SA 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.