Correlation Between CREO MEDICAL and TIMES CHINA

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

Diversification Opportunities for CREO MEDICAL and TIMES CHINA

0.68

Correlation Coefficient

CREO MEDICAL  TIMES CHINA

Poor diversification

The 3 months correlation between CREO and TIMES is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding CREO MEDICAL GRP and TIMES CHINA HLDGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TIMES CHINA HLDGS 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 TIMES CHINA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TIMES CHINA HLDGS has no effect on the direction of CREO MEDICAL i.e., CREO MEDICAL and TIMES CHINA go up and down completely randomly.

Pair Corralation between CREO MEDICAL and TIMES CHINA

Assuming the 90 days horizon CREO MEDICAL GRP is expected to generate 0.59 times more return on investment than TIMES CHINA. However, CREO MEDICAL GRP is 1.71 times less risky than TIMES CHINA. It trades about -0.16 of its potential returns per unit of risk. TIMES CHINA HLDGS is currently generating about -0.1 per unit of risk. If you would invest  22.00  in CREO MEDICAL GRP on December 20, 2024 and sell it today you would lose (8.00) from holding CREO MEDICAL GRP or give up 36.36% of portfolio value over 90 days.

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

CREO MEDICAL GRP  vs.  TIMES CHINA HLDGS

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.

TIMES CHINA HLDGS

Risk-Adjusted Performance

Very Weak

Over the last 90 days TIMES CHINA HLDGS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile 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.

Pair Trading with CREO MEDICAL and TIMES CHINA

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

The idea behind CREO MEDICAL GRP and TIMES CHINA HLDGS 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.