Correlation Between Creotech Instruments and Lubelski Wegiel

Can any of the company-specific risk be diversified away by investing in both Creotech Instruments and Lubelski Wegiel 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 Creotech Instruments and Lubelski Wegiel into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Creotech Instruments SA and Lubelski Wegiel Bogdanka, you can compare the effects of market volatilities on Creotech Instruments and Lubelski Wegiel 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 Creotech Instruments with a short position of Lubelski Wegiel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Creotech Instruments and Lubelski Wegiel.

Diversification Opportunities for Creotech Instruments and Lubelski Wegiel

-0.6

Correlation Coefficient

Creotech Instruments  Lubelski Wegiel

Excellent diversification

The 3 months correlation between Creotech and Lubelski is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Creotech Instruments SA and Lubelski Wegiel Bogdanka in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lubelski Wegiel Bogdanka and Creotech Instruments 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 Creotech Instruments SA are associated (or correlated) with Lubelski Wegiel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lubelski Wegiel Bogdanka has no effect on the direction of Creotech Instruments i.e., Creotech Instruments and Lubelski Wegiel go up and down completely randomly.

Pair Corralation between Creotech Instruments and Lubelski Wegiel

Assuming the 90 days trading horizon Creotech Instruments SA is expected to under-perform the Lubelski Wegiel. But the stock apears to be less risky and, when comparing its historical volatility, Creotech Instruments SA is 1.61 times less risky than Lubelski Wegiel. The stock trades about -0.11 of its potential returns per unit of risk. The Lubelski Wegiel Bogdanka is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  2,178  in Lubelski Wegiel Bogdanka on September 18, 2024 and sell it today you would earn a total of  0.00  from holding Lubelski Wegiel Bogdanka or generate 0.0% return on investment over 90 days.

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

Creotech Instruments SA  vs.  Lubelski Wegiel Bogdanka

Creotech Instruments

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Creotech Instruments SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Lubelski Wegiel Bogdanka

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Lubelski Wegiel Bogdanka are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Lubelski Wegiel may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Creotech Instruments and Lubelski Wegiel

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

The idea behind Creotech Instruments SA and Lubelski Wegiel Bogdanka 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.