Correlation Between Immobile and Creotech Instruments

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

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

Diversification Opportunities for Immobile and Creotech Instruments

-0.31

Correlation Coefficient

Immobile  Creotech Instruments

Very good diversification

The 3 months correlation between Immobile and Creotech is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Immobile and Creotech Instruments SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Creotech Instruments and Immobile 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 Immobile are associated (or correlated) with Creotech Instruments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Creotech Instruments has no effect on the direction of Immobile i.e., Immobile and Creotech Instruments go up and down completely randomly.

Pair Corralation between Immobile and Creotech Instruments

Assuming the 90 days trading horizon Immobile is expected to under-perform the Creotech Instruments. But the stock apears to be less risky and, when comparing its historical volatility, Immobile is 2.55 times less risky than Creotech Instruments. The stock trades about -0.11 of its potential returns per unit of risk. The Creotech Instruments SA is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  15,100  in Creotech Instruments SA on October 12, 2024 and sell it today you would earn a total of  2,550  from holding Creotech Instruments SA or generate 16.89% return on investment over 90 days.

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

Immobile  vs.  Creotech Instruments SA

Immobile

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Immobile are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Immobile may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Creotech Instruments

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Creotech Instruments SA are ranked lower than 15 (%) 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.

Pair Trading with Immobile and Creotech Instruments

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

The idea behind Immobile and Creotech Instruments 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 Commodity Directory module to find actively traded commodities issued by global exchanges.