Correlation Between CREO MEDICAL and Nasdaq

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

Diversification Opportunities for CREO MEDICAL and Nasdaq

-0.87

Correlation Coefficient

CREO MEDICAL  Nasdaq

Pay attention - limited upside

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

Pair Corralation between CREO MEDICAL and Nasdaq

Assuming the 90 days horizon CREO MEDICAL GRP is expected to generate 4.88 times more return on investment than Nasdaq. However, CREO MEDICAL is 4.88 times more volatile than Nasdaq Inc. It trades about 0.33 of its potential returns per unit of risk. Nasdaq Inc is currently generating about -0.11 per unit of risk. If you would invest  16.00  in CREO MEDICAL GRP on October 10, 2024 and sell it today you would earn a total of  6.00  from holding CREO MEDICAL GRP or generate 37.5% 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.  Nasdaq Inc

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.

Nasdaq Inc

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nasdaq Inc are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Nasdaq may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with CREO MEDICAL and Nasdaq

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

The idea behind CREO MEDICAL GRP and Nasdaq Inc 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.

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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.