Correlation Between Cerus and Pulmonx Corp
Can any of the company-specific risk be diversified away by investing in both Cerus and Pulmonx Corp 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 Pulmonx Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cerus and Pulmonx Corp, you can compare the effects of market volatilities on Cerus and Pulmonx Corp 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 Pulmonx Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cerus and Pulmonx Corp.
Diversification Opportunities for Cerus and Pulmonx Corp
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Cerus and Pulmonx is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Cerus and Pulmonx Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pulmonx Corp 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 Pulmonx Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pulmonx Corp has no effect on the direction of Cerus i.e., Cerus and Pulmonx Corp go up and down completely randomly.
Pair Corralation between Cerus and Pulmonx Corp
Given the investment horizon of 90 days Cerus is expected to generate 1.08 times less return on investment than Pulmonx Corp. But when comparing it to its historical volatility, Cerus is 1.02 times less risky than Pulmonx Corp. It trades about 0.08 of its potential returns per unit of risk. Pulmonx Corp is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 621.00 in Pulmonx Corp on August 28, 2024 and sell it today you would earn a total of 40.00 from holding Pulmonx Corp or generate 6.44% 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. Pulmonx Corp
Performance |
| Timeline |
| Cerus |
| Pulmonx Corp |
Cerus and Pulmonx Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cerus and Pulmonx Corp
The main advantage of trading using opposite Cerus and Pulmonx Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cerus position performs unexpectedly, Pulmonx Corp 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 Pulmonx Corp will offset losses from the drop in Pulmonx Corp's long position.The idea behind Cerus and Pulmonx Corp 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.| Pulmonx Corp vs. Iradimed Co | Pulmonx Corp vs. Orthofix Medical | Pulmonx Corp vs. Neuropace | Pulmonx Corp vs. Integer Holdings 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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