Correlation Between Cerus and Aethlon Medical
Can any of the company-specific risk be diversified away by investing in both Cerus and Aethlon 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 Cerus and Aethlon Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cerus and Aethlon Medical, you can compare the effects of market volatilities on Cerus and Aethlon 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 Cerus with a short position of Aethlon Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cerus and Aethlon Medical.
Diversification Opportunities for Cerus and Aethlon Medical
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cerus and Aethlon is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Cerus and Aethlon Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aethlon Medical and Cerus 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 Cerus are associated (or correlated) with Aethlon Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aethlon Medical has no effect on the direction of Cerus i.e., Cerus and Aethlon Medical go up and down completely randomly.
Pair Corralation between Cerus and Aethlon Medical
Given the investment horizon of 90 days Cerus is expected to under-perform the Aethlon Medical. But the stock apears to be less risky and, when comparing its historical volatility, Cerus is 2.47 times less risky than Aethlon Medical. The stock trades about -0.03 of its potential returns per unit of risk. The Aethlon Medical is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 36.00 in Aethlon Medical on September 20, 2024 and sell it today you would earn a total of 30.00 from holding Aethlon Medical or generate 83.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cerus vs. Aethlon Medical
Performance |
| Timeline |
| Cerus |
| Aethlon Medical |
Cerus and Aethlon Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cerus and Aethlon Medical
The main advantage of trading using opposite Cerus and Aethlon Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cerus position performs unexpectedly, Aethlon 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 Aethlon Medical will offset losses from the drop in Aethlon Medical's long position.The idea behind Cerus and Aethlon Medical 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.| Aethlon Medical vs. Tivic Health Systems | Aethlon Medical vs. Bluejay Diagnostics | Aethlon Medical vs. Heart Test Laboratories | Aethlon Medical vs. Nuwellis |
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 Stocks Directory module to find actively traded stocks across global markets.
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