Correlation Between Creotech Instruments and Bank Millennium

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

Diversification Opportunities for Creotech Instruments and Bank Millennium

0.58

Correlation Coefficient

Creotech Instruments  Bank Millennium

Very weak diversification

The 3 months correlation between Creotech and Bank is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Creotech Instruments SA and Bank Millennium SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Millennium SA 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 Bank Millennium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Millennium SA has no effect on the direction of Creotech Instruments i.e., Creotech Instruments and Bank Millennium go up and down completely randomly.

Pair Corralation between Creotech Instruments and Bank Millennium

Assuming the 90 days trading horizon Creotech Instruments is expected to generate 1.48 times less return on investment than Bank Millennium. In addition to that, Creotech Instruments is 1.24 times more volatile than Bank Millennium SA. It trades about 0.03 of its total potential returns per unit of risk. Bank Millennium SA is currently generating about 0.06 per unit of volatility. If you would invest  523.00  in Bank Millennium SA on October 10, 2024 and sell it today you would earn a total of  399.00  from holding Bank Millennium SA or generate 76.29% return on investment over 90 days.

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

Creotech Instruments SA  vs.  Bank Millennium SA

Creotech Instruments

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Creotech Instruments SA are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Creotech Instruments reported solid returns over the last few months and may actually be approaching a breakup point.

Bank Millennium SA

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Bank Millennium SA are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Bank Millennium may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Creotech Instruments and Bank Millennium

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

The idea behind Creotech Instruments SA and Bank Millennium SA 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.