Correlation Between CREO MEDICAL and DBS Group

Can any of the company-specific risk be diversified away by investing in both CREO MEDICAL and DBS Group 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 DBS Group 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 DBS Group Holdings, you can compare the effects of market volatilities on CREO MEDICAL and DBS Group 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 DBS Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of CREO MEDICAL and DBS Group.

Diversification Opportunities for CREO MEDICAL and DBS Group

-0.25

Correlation Coefficient

CREO MEDICAL  DBS Group

Very good diversification

The 3 months correlation between CREO and DBS is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding CREO MEDICAL GRP and DBS Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DBS Group Holdings 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 DBS Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DBS Group Holdings has no effect on the direction of CREO MEDICAL i.e., CREO MEDICAL and DBS Group go up and down completely randomly.

Pair Corralation between CREO MEDICAL and DBS Group

Assuming the 90 days horizon CREO MEDICAL is expected to generate 1.29 times less return on investment than DBS Group. In addition to that, CREO MEDICAL is 3.78 times more volatile than DBS Group Holdings. It trades about 0.02 of its total potential returns per unit of risk. DBS Group Holdings is currently generating about 0.09 per unit of volatility. If you would invest  1,911  in DBS Group Holdings on October 23, 2024 and sell it today you would earn a total of  1,208  from holding DBS Group Holdings or generate 63.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

CREO MEDICAL GRP  vs.  DBS Group Holdings

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 fragile 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.

DBS Group Holdings

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in DBS Group Holdings are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, DBS Group reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CREO MEDICAL and DBS Group

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

The idea behind CREO MEDICAL GRP and DBS Group Holdings 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.