Correlation Between CREO MEDICAL and Japan Asia

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

Diversification Opportunities for CREO MEDICAL and Japan Asia

-0.87

Correlation Coefficient

CREO MEDICAL  Japan Asia

Pay attention - limited upside

The 3 months correlation between CREO and Japan is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding CREO MEDICAL GRP and Japan Asia Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Japan Asia Investment 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 Japan Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Japan Asia Investment has no effect on the direction of CREO MEDICAL i.e., CREO MEDICAL and Japan Asia go up and down completely randomly.

Pair Corralation between CREO MEDICAL and Japan Asia

Assuming the 90 days horizon CREO MEDICAL GRP is expected to under-perform the Japan Asia. In addition to that, CREO MEDICAL is 1.49 times more volatile than Japan Asia Investment. It trades about -0.16 of its total potential returns per unit of risk. Japan Asia Investment is currently generating about 0.17 per unit of volatility. If you would invest  123.00  in Japan Asia Investment on December 20, 2024 and sell it today you would earn a total of  37.00  from holding Japan Asia Investment or generate 30.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

CREO MEDICAL GRP  vs.  Japan Asia Investment

CREO MEDICAL GRP

Risk-Adjusted Performance

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 unsteady performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Japan Asia Investment

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Japan Asia Investment are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Japan Asia reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CREO MEDICAL and Japan Asia

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

The idea behind CREO MEDICAL GRP and Japan Asia Investment 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.