Correlation Between Pharmather Holdings and Creative Medical

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

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

Diversification Opportunities for Pharmather Holdings and Creative Medical

0.11

Correlation Coefficient

Pharmather Holdings  Creative Medical

Average diversification

The 3 months correlation between Pharmather and Creative is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Pharmather Holdings 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 Pharmather Holdings 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 Pharmather Holdings 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 Pharmather Holdings i.e., Pharmather Holdings and Creative Medical go up and down completely randomly.

Pair Corralation between Pharmather Holdings and Creative Medical

Assuming the 90 days horizon Pharmather Holdings is expected to generate 0.93 times more return on investment than Creative Medical. However, Pharmather Holdings is 1.08 times less risky than Creative Medical. It trades about 0.01 of its potential returns per unit of risk. Creative Medical Technology is currently generating about -0.04 per unit of risk. If you would invest  21.00  in Pharmather Holdings on September 5, 2024 and sell it today you would lose (2.00) from holding Pharmather Holdings or give up 9.52% of portfolio value over 90 days.

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

Pharmather Holdings  vs.  Creative Medical Technology

Pharmather Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pharmather Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Pharmather Holdings is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

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 Pharmather Holdings and Creative Medical

The main advantage of trading using opposite Pharmather Holdings and Creative Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pharmather Holdings 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 Pharmather Holdings 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 CEOs Directory module to screen CEOs from public companies around the world.