Correlation Between Creative Medical and Cardio Diagnostics

Can any of the company-specific risk be diversified away by investing in both Creative Medical and Cardio Diagnostics 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 Creative Medical and Cardio Diagnostics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Creative Medical Technology and Cardio Diagnostics Holdings, you can compare the effects of market volatilities on Creative Medical and Cardio Diagnostics 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 Creative Medical with a short position of Cardio Diagnostics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Creative Medical and Cardio Diagnostics.

Diversification Opportunities for Creative Medical and Cardio Diagnostics

-0.44

Correlation Coefficient

Creative Medical  Cardio Diagnostics

Very good diversification

The 3 months correlation between Creative and Cardio is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Creative Medical Technology and Cardio Diagnostics Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cardio Diagnostics and Creative 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 Creative Medical Technology are associated (or correlated) with Cardio Diagnostics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cardio Diagnostics has no effect on the direction of Creative Medical i.e., Creative Medical and Cardio Diagnostics go up and down completely randomly.

Pair Corralation between Creative Medical and Cardio Diagnostics

Given the investment horizon of 90 days Creative Medical Technology is expected to generate 1.07 times more return on investment than Cardio Diagnostics. However, Creative Medical is 1.07 times more volatile than Cardio Diagnostics Holdings. It trades about 0.04 of its potential returns per unit of risk. Cardio Diagnostics Holdings is currently generating about -0.1 per unit of risk. If you would invest  234.00  in Creative Medical Technology on December 28, 2024 and sell it today you would lose (7.00) from holding Creative Medical Technology or give up 2.99% of portfolio value over 90 days.

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

Creative Medical Technology  vs.  Cardio Diagnostics Holdings

Creative Medical Tec

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Creative Medical Technology are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak essential indicators, Creative Medical showed solid returns over the last few months and may actually be approaching a breakup point.

Cardio Diagnostics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cardio Diagnostics Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's forward indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Creative Medical and Cardio Diagnostics

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

The idea behind Creative Medical Technology and Cardio Diagnostics 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.