Correlation Between Chia and CREO MEDICAL

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

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

Diversification Opportunities for Chia and CREO MEDICAL

-0.67

Correlation Coefficient

Chia  CREO MEDICAL

Excellent diversification

The 3 months correlation between Chia and CREO is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Chia and CREO MEDICAL GRP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CREO MEDICAL GRP and Chia 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 Chia 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 GRP has no effect on the direction of Chia i.e., Chia and CREO MEDICAL go up and down completely randomly.

Pair Corralation between Chia and CREO MEDICAL

Assuming the 90 days trading horizon Chia is expected to generate 1.95 times more return on investment than CREO MEDICAL. However, Chia is 1.95 times more volatile than CREO MEDICAL GRP. It trades about 0.0 of its potential returns per unit of risk. CREO MEDICAL GRP is currently generating about -0.08 per unit of risk. If you would invest  3,158  in Chia on October 9, 2024 and sell it today you would lose (949.00) from holding Chia or give up 30.05% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	66.27%
Values	Daily Returns

Chia  vs.  CREO MEDICAL GRP

Chia

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Chia are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical indicators, Chia exhibited solid returns over the last few months and may actually be approaching a breakup point.

CREO MEDICAL GRP

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CREO MEDICAL GRP has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Chia and CREO MEDICAL

The main advantage of trading using opposite Chia and CREO MEDICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chia 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 Chia and CREO MEDICAL GRP 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.