Correlation Between CERo Therapeutics and XOMA
Can any of the company-specific risk be diversified away by investing in both CERo Therapeutics and XOMA 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 CERo Therapeutics and XOMA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CERo Therapeutics Holdings and XOMA Corporation, you can compare the effects of market volatilities on CERo Therapeutics and XOMA 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 CERo Therapeutics with a short position of XOMA. Check out your portfolio center. Please also check ongoing floating volatility patterns of CERo Therapeutics and XOMA.
Diversification Opportunities for CERo Therapeutics and XOMA
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CERo and XOMA is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding CERo Therapeutics Holdings and XOMA Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XOMA and CERo Therapeutics 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 CERo Therapeutics Holdings are associated (or correlated) with XOMA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XOMA has no effect on the direction of CERo Therapeutics i.e., CERo Therapeutics and XOMA go up and down completely randomly.
Pair Corralation between CERo Therapeutics and XOMA
Assuming the 90 days horizon CERo Therapeutics Holdings is expected to generate 271.68 times more return on investment than XOMA. However, CERo Therapeutics is 271.68 times more volatile than XOMA Corporation. It trades about 0.3 of its potential returns per unit of risk. XOMA Corporation is currently generating about -0.39 per unit of risk. If you would invest 0.60 in CERo Therapeutics Holdings on August 27, 2024 and sell it today you would earn a total of 1.38 from holding CERo Therapeutics Holdings or generate 230.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
CERo Therapeutics Holdings vs. XOMA Corp.
Performance |
| Timeline |
| CERo Therapeutics |
| XOMA |
CERo Therapeutics and XOMA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CERo Therapeutics and XOMA
The main advantage of trading using opposite CERo Therapeutics and XOMA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CERo Therapeutics position performs unexpectedly, XOMA 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 XOMA will offset losses from the drop in XOMA's long position.| CERo Therapeutics vs. Vivani Medical | CERo Therapeutics vs. Verve Therapeutics | CERo Therapeutics vs. Bright Minds Biosciences | CERo Therapeutics vs. Alpha Tau Medical |
| XOMA vs. Harrow Health 8625 | XOMA vs. SiriusPoint | XOMA vs. New York Mortgage | XOMA vs. Sachem Capital Corp |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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