Correlation Between Enzolytics and Creative Medical

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

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

Diversification Opportunities for Enzolytics and Creative Medical

0.5

Correlation Coefficient

Enzolytics  Creative Medical

Very weak diversification

The 3 months correlation between Enzolytics and Creative is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Enzolytics and Creative Medical Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Creative Medical Tec and Enzolytics 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 Enzolytics are associated (or correlated) with Creative Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Creative Medical Tec has no effect on the direction of Enzolytics i.e., Enzolytics and Creative Medical go up and down completely randomly.

Pair Corralation between Enzolytics and Creative Medical

Given the investment horizon of 90 days Enzolytics is expected to generate 1.74 times more return on investment than Creative Medical. However, Enzolytics is 1.74 times more volatile than Creative Medical Technology. It trades about 0.01 of its potential returns per unit of risk. Creative Medical Technology is currently generating about -0.03 per unit of risk. If you would invest  0.19  in Enzolytics on September 13, 2024 and sell it today you would lose (0.05) from holding Enzolytics or give up 26.32% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Enzolytics  vs.  Creative Medical Technology

Enzolytics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Enzolytics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather weak basic indicators, Enzolytics may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Creative Medical Tec

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Creative Medical Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's essential indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Enzolytics and Creative Medical

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

The idea behind Enzolytics and Creative Medical 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.