Correlation Between Creo Medical and Draper Esprit

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

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

Diversification Opportunities for Creo Medical and Draper Esprit

0.42

Correlation Coefficient

Creo Medical  Draper Esprit

Very weak diversification

The 3 months correlation between Creo and Draper is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Creo Medical Group and Draper Esprit PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Draper Esprit PLC and Creo Medical 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 Creo Medical Group are associated (or correlated) with Draper Esprit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Draper Esprit PLC has no effect on the direction of Creo Medical i.e., Creo Medical and Draper Esprit go up and down completely randomly.

Pair Corralation between Creo Medical and Draper Esprit

Assuming the 90 days trading horizon Creo Medical Group is expected to generate 1.73 times more return on investment than Draper Esprit. However, Creo Medical is 1.73 times more volatile than Draper Esprit PLC. It trades about 0.14 of its potential returns per unit of risk. Draper Esprit PLC is currently generating about 0.15 per unit of risk. If you would invest  975.00  in Creo Medical Group on April 24, 2025 and sell it today you would earn a total of  375.00  from holding Creo Medical Group or generate 38.46% return on investment over 90 days.

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

Creo Medical Group  vs.  Draper Esprit PLC

Creo Medical Group

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Creo Medical Group are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Creo Medical unveiled solid returns over the last few months and may actually be approaching a breakup point.

Draper Esprit PLC

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Draper Esprit PLC are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Draper Esprit unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Creo Medical and Draper Esprit

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

The idea behind Creo Medical Group and Draper Esprit PLC 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.