Correlation Between Modine Manufacturing and CERo Therapeutics
Can any of the company-specific risk be diversified away by investing in both Modine Manufacturing and CERo Therapeutics 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 Modine Manufacturing and CERo Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Modine Manufacturing and CERo Therapeutics Holdings, you can compare the effects of market volatilities on Modine Manufacturing and CERo Therapeutics 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 Modine Manufacturing with a short position of CERo Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Modine Manufacturing and CERo Therapeutics.
Diversification Opportunities for Modine Manufacturing and CERo Therapeutics
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Modine and CERo is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Modine Manufacturing and CERo Therapeutics Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CERo Therapeutics and Modine Manufacturing 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 Modine Manufacturing are associated (or correlated) with CERo Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CERo Therapeutics has no effect on the direction of Modine Manufacturing i.e., Modine Manufacturing and CERo Therapeutics go up and down completely randomly.
Pair Corralation between Modine Manufacturing and CERo Therapeutics
Considering the 90-day investment horizon Modine Manufacturing is expected to generate 9.43 times less return on investment than CERo Therapeutics. But when comparing it to its historical volatility, Modine Manufacturing is 7.68 times less risky than CERo Therapeutics. It trades about 0.08 of its potential returns per unit of risk. CERo Therapeutics Holdings is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 3.05 in CERo Therapeutics Holdings on September 3, 2024 and sell it today you would lose (1.95) from holding CERo Therapeutics Holdings or give up 63.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 74.4% |
| Values | Daily Returns |
Modine Manufacturing vs. CERo Therapeutics Holdings
Performance |
| Timeline |
| Modine Manufacturing |
| CERo Therapeutics |
Modine Manufacturing and CERo Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Modine Manufacturing and CERo Therapeutics
The main advantage of trading using opposite Modine Manufacturing and CERo Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Modine Manufacturing position performs unexpectedly, CERo Therapeutics 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 CERo Therapeutics will offset losses from the drop in CERo Therapeutics' long position.| Modine Manufacturing vs. Cooper Stnd | Modine Manufacturing vs. Motorcar Parts of | Modine Manufacturing vs. American Axle Manufacturing | Modine Manufacturing vs. Stoneridge |
| CERo Therapeutics vs. Vincerx Pharma | CERo Therapeutics vs. Viracta Therapeutics | CERo Therapeutics vs. Dogwood Therapeutics, | CERo Therapeutics vs. Viking Therapeutics |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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