Correlation Between Creo Medical and Eco Oil

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

By analyzing existing cross correlation between Creo Medical Group and Eco Oil Gas, you can compare the effects of market volatilities on Creo Medical and Eco Oil 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 Eco Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Creo Medical and Eco Oil.

Diversification Opportunities for Creo Medical and Eco Oil

0.04

Correlation Coefficient

Creo Medical  Eco Oil

Significant diversification

The 3 months correlation between Creo and Eco is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Creo Medical Group and Eco Oil Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eco Oil Gas 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 Group are associated (or correlated) with Eco Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eco Oil Gas has no effect on the direction of Creo Medical i.e., Creo Medical and Eco Oil go up and down completely randomly.

Pair Corralation between Creo Medical and Eco Oil

Assuming the 90 days trading horizon Creo Medical Group is expected to under-perform the Eco Oil. In addition to that, Creo Medical is 1.02 times more volatile than Eco Oil Gas. It trades about -0.02 of its total potential returns per unit of risk. Eco Oil Gas is currently generating about 0.11 per unit of volatility. If you would invest  945.00  in Eco Oil Gas on October 20, 2024 and sell it today you would earn a total of  218.00  from holding Eco Oil Gas or generate 23.07% return on investment over 90 days.

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

Creo Medical Group  vs.  Eco Oil Gas

Creo Medical Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Creo Medical Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Creo Medical is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Eco Oil Gas

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Eco Oil Gas are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Eco Oil exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Creo Medical and Eco Oil

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

The idea behind Creo Medical Group and Eco Oil Gas 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.