Correlation Between SCHMID Group and Creative Global

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

By analyzing existing cross correlation between SCHMID Group NV and Creative Global Technology, you can compare the effects of market volatilities on SCHMID Group and Creative Global 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 SCHMID Group with a short position of Creative Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCHMID Group and Creative Global.

Diversification Opportunities for SCHMID Group and Creative Global

0.36

Correlation Coefficient

SCHMID Group  Creative Global

Weak diversification

The 3 months correlation between SCHMID and Creative is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding SCHMID Group NV and Creative Global Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Creative Global Tech and SCHMID 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 SCHMID Group NV are associated (or correlated) with Creative Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Creative Global Tech has no effect on the direction of SCHMID Group i.e., SCHMID Group and Creative Global go up and down completely randomly.

Pair Corralation between SCHMID Group and Creative Global

Assuming the 90 days horizon SCHMID Group NV is expected to generate 1.11 times more return on investment than Creative Global. However, SCHMID Group is 1.11 times more volatile than Creative Global Technology. It trades about -0.19 of its potential returns per unit of risk. Creative Global Technology is currently generating about -0.36 per unit of risk. If you would invest  31.00  in SCHMID Group NV on October 15, 2024 and sell it today you would lose (7.98) from holding SCHMID Group NV or give up 25.74% of portfolio value over 90 days.

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

SCHMID Group NV  vs.  Creative Global Technology

SCHMID Group NV

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SCHMID Group NV are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting fundamental indicators, SCHMID Group showed solid returns over the last few months and may actually be approaching a breakup point.

Creative Global Tech

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Creative Global Technology are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain basic indicators, Creative Global disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SCHMID Group and Creative Global

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

The idea behind SCHMID Group NV and Creative Global Technology 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.