Correlation Between Cerus and Bruker
Can any of the company-specific risk be diversified away by investing in both Cerus and Bruker 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 Bruker into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cerus and Bruker, you can compare the effects of market volatilities on Cerus and Bruker 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 Bruker. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cerus and Bruker.
Diversification Opportunities for Cerus and Bruker
Weak diversification
The 3 months correlation between Cerus and Bruker is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Cerus and Bruker in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bruker 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 Bruker. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bruker has no effect on the direction of Cerus i.e., Cerus and Bruker go up and down completely randomly.
Pair Corralation between Cerus and Bruker
Given the investment horizon of 90 days Cerus is expected to generate 1.36 times more return on investment than Bruker. However, Cerus is 1.36 times more volatile than Bruker. It trades about 0.08 of its potential returns per unit of risk. Bruker is currently generating about 0.03 per unit of risk. If you would invest 172.00 in Cerus on August 28, 2024 and sell it today you would earn a total of 10.00 from holding Cerus or generate 5.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cerus vs. Bruker
Performance |
| Timeline |
| Cerus |
| Bruker |
Cerus and Bruker Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cerus and Bruker
The main advantage of trading using opposite Cerus and Bruker positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cerus position performs unexpectedly, Bruker 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 Bruker will offset losses from the drop in Bruker's long position.The idea behind Cerus and Bruker 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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