Correlation Between Creotech Instruments and SOFTWARE MANSION

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

By analyzing existing cross correlation between Creotech Instruments SA and SOFTWARE MANSION SPOLKA, you can compare the effects of market volatilities on Creotech Instruments and SOFTWARE MANSION 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 Creotech Instruments with a short position of SOFTWARE MANSION. Check out your portfolio center. Please also check ongoing floating volatility patterns of Creotech Instruments and SOFTWARE MANSION.

Diversification Opportunities for Creotech Instruments and SOFTWARE MANSION

-0.17

Correlation Coefficient

Creotech Instruments  SOFTWARE MANSION

Good diversification

The 3 months correlation between Creotech and SOFTWARE is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Creotech Instruments SA and SOFTWARE MANSION SPOLKA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOFTWARE MANSION SPOLKA and Creotech Instruments 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 Creotech Instruments SA are associated (or correlated) with SOFTWARE MANSION. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOFTWARE MANSION SPOLKA has no effect on the direction of Creotech Instruments i.e., Creotech Instruments and SOFTWARE MANSION go up and down completely randomly.

Pair Corralation between Creotech Instruments and SOFTWARE MANSION

Assuming the 90 days trading horizon Creotech Instruments is expected to generate 4.95 times less return on investment than SOFTWARE MANSION. But when comparing it to its historical volatility, Creotech Instruments SA is 1.23 times less risky than SOFTWARE MANSION. It trades about 0.05 of its potential returns per unit of risk. SOFTWARE MANSION SPOLKA is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  3,800  in SOFTWARE MANSION SPOLKA on April 24, 2025 and sell it today you would earn a total of  1,450  from holding SOFTWARE MANSION SPOLKA or generate 38.16% return on investment over 90 days.

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

Creotech Instruments SA  vs.  SOFTWARE MANSION SPOLKA

Creotech Instruments

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Creotech Instruments SA are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Creotech Instruments may actually be approaching a critical reversion point that can send shares even higher in August 2025.

SOFTWARE MANSION SPOLKA

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in SOFTWARE MANSION SPOLKA are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, SOFTWARE MANSION reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Creotech Instruments and SOFTWARE MANSION

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

The idea behind Creotech Instruments SA and SOFTWARE MANSION SPOLKA 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.

Check out your portfolio center.

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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.