Correlation Between Cerus and Accuray Incorporated
Can any of the company-specific risk be diversified away by investing in both Cerus and Accuray Incorporated 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 Accuray Incorporated into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cerus and Accuray Incorporated, you can compare the effects of market volatilities on Cerus and Accuray Incorporated 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 Accuray Incorporated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cerus and Accuray Incorporated.
Diversification Opportunities for Cerus and Accuray Incorporated
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cerus and Accuray is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Cerus and Accuray Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accuray Incorporated 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 Accuray Incorporated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accuray Incorporated has no effect on the direction of Cerus i.e., Cerus and Accuray Incorporated go up and down completely randomly.
Pair Corralation between Cerus and Accuray Incorporated
Given the investment horizon of 90 days Cerus is expected to generate 1.63 times less return on investment than Accuray Incorporated. In addition to that, Cerus is 1.13 times more volatile than Accuray Incorporated. It trades about 0.07 of its total potential returns per unit of risk. Accuray Incorporated is currently generating about 0.13 per unit of volatility. If you would invest 188.00 in Accuray Incorporated on August 31, 2024 and sell it today you would earn a total of 23.00 from holding Accuray Incorporated or generate 12.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cerus vs. Accuray Incorporated
Performance |
| Timeline |
| Cerus |
| Accuray Incorporated |
Cerus and Accuray Incorporated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cerus and Accuray Incorporated
The main advantage of trading using opposite Cerus and Accuray Incorporated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cerus position performs unexpectedly, Accuray Incorporated 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 Accuray Incorporated will offset losses from the drop in Accuray Incorporated's long position.The idea behind Cerus and Accuray Incorporated 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.| Accuray Incorporated vs. SurModics | Accuray Incorporated vs. Axogen Inc | Accuray Incorporated vs. Bioventus | Accuray Incorporated vs. Cutera Inc |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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