Correlation Between Cerus and Senseonics Holdings
Can any of the company-specific risk be diversified away by investing in both Cerus and Senseonics Holdings 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 Senseonics Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cerus and Senseonics Holdings, you can compare the effects of market volatilities on Cerus and Senseonics Holdings 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 Senseonics Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cerus and Senseonics Holdings.
Diversification Opportunities for Cerus and Senseonics Holdings
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cerus and Senseonics is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Cerus and Senseonics Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senseonics Holdings 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 Senseonics Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Senseonics Holdings has no effect on the direction of Cerus i.e., Cerus and Senseonics Holdings go up and down completely randomly.
Pair Corralation between Cerus and Senseonics Holdings
Given the investment horizon of 90 days Cerus is expected to generate 1.03 times more return on investment than Senseonics Holdings. However, Cerus is 1.03 times more volatile than Senseonics Holdings. It trades about -0.01 of its potential returns per unit of risk. Senseonics Holdings is currently generating about -0.01 per unit of risk. If you would invest 225.00 in Cerus on September 20, 2024 and sell it today you would lose (67.00) from holding Cerus or give up 29.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cerus vs. Senseonics Holdings
Performance |
| Timeline |
| Cerus |
| Senseonics Holdings |
Cerus and Senseonics Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cerus and Senseonics Holdings
The main advantage of trading using opposite Cerus and Senseonics Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cerus position performs unexpectedly, Senseonics Holdings 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 Senseonics Holdings will offset losses from the drop in Senseonics Holdings' long position.The idea behind Cerus and Senseonics Holdings 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.| Senseonics Holdings vs. Insulet | Senseonics Holdings vs. Tandem Diabetes Care | Senseonics Holdings vs. Abbott Laboratories | Senseonics Holdings vs. Align Technology |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |