Correlation Between Kitwave Group and Creo Medical

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

By analyzing existing cross correlation between Kitwave Group PLC and Creo Medical Group, you can compare the effects of market volatilities on Kitwave Group and Creo Medical 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 Kitwave Group with a short position of Creo Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kitwave Group and Creo Medical.

Diversification Opportunities for Kitwave Group and Creo Medical

0.78

Correlation Coefficient

Kitwave Group  Creo Medical

Poor diversification

The 3 months correlation between Kitwave and Creo is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Kitwave Group PLC and Creo Medical Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Creo Medical Group and Kitwave Group 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 Kitwave Group PLC are associated (or correlated) with Creo Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Creo Medical Group has no effect on the direction of Kitwave Group i.e., Kitwave Group and Creo Medical go up and down completely randomly.

Pair Corralation between Kitwave Group and Creo Medical

Assuming the 90 days trading horizon Kitwave Group PLC is expected to generate 0.77 times more return on investment than Creo Medical. However, Kitwave Group PLC is 1.3 times less risky than Creo Medical. It trades about -0.12 of its potential returns per unit of risk. Creo Medical Group is currently generating about -0.2 per unit of risk. If you would invest  30,689  in Kitwave Group PLC on December 30, 2024 and sell it today you would lose (5,089) from holding Kitwave Group PLC or give up 16.58% of portfolio value over 90 days.

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

Kitwave Group PLC  vs.  Creo Medical Group

Kitwave Group PLC

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kitwave Group PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Creo Medical Group

Risk-Adjusted Performance

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 uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Kitwave Group and Creo Medical

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

The idea behind Kitwave Group PLC and Creo Medical Group 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.