Correlation Between United Fire and CERo Therapeutics
Can any of the company-specific risk be diversified away by investing in both United Fire 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 United Fire and CERo Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Fire Group and CERo Therapeutics Holdings, you can compare the effects of market volatilities on United Fire 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 United Fire with a short position of CERo Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Fire and CERo Therapeutics.
Diversification Opportunities for United Fire and CERo Therapeutics
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between United and CERo is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding United Fire Group and CERo Therapeutics Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CERo Therapeutics and United Fire 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 United Fire Group 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 United Fire i.e., United Fire and CERo Therapeutics go up and down completely randomly.
Pair Corralation between United Fire and CERo Therapeutics
Given the investment horizon of 90 days United Fire is expected to generate 17.82 times less return on investment than CERo Therapeutics. But when comparing it to its historical volatility, United Fire Group is 10.1 times less risky than CERo Therapeutics. It trades about 0.06 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 3.30 in CERo Therapeutics Holdings on October 26, 2024 and sell it today you would lose (1.71) from holding CERo Therapeutics Holdings or give up 51.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 80.49% |
| Values | Daily Returns |
United Fire Group vs. CERo Therapeutics Holdings
Performance |
| Timeline |
| United Fire Group |
| CERo Therapeutics |
United Fire and CERo Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Fire and CERo Therapeutics
The main advantage of trading using opposite United Fire and CERo Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Fire 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.| United Fire vs. Donegal Group B | United Fire vs. Horace Mann Educators | United Fire vs. Donegal Group A | United Fire vs. Global Indemnity PLC |
| CERo Therapeutics vs. Unum Group | CERo Therapeutics vs. Funko Inc | CERo Therapeutics vs. United Fire Group | CERo Therapeutics vs. Selective Insurance Group |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |