Correlation Between CERo Therapeutics and AptarGroup

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Can any of the company-specific risk be diversified away by investing in both CERo Therapeutics and AptarGroup 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 CERo Therapeutics and AptarGroup into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CERo Therapeutics Holdings and AptarGroup, you can compare the effects of market volatilities on CERo Therapeutics and AptarGroup 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 CERo Therapeutics with a short position of AptarGroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of CERo Therapeutics and AptarGroup.

Diversification Opportunities for CERo Therapeutics and AptarGroup

0.32
  Correlation Coefficient

Weak diversification

The 3 months correlation between CERo and AptarGroup is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding CERo Therapeutics Holdings and AptarGroup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AptarGroup and CERo Therapeutics 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 CERo Therapeutics Holdings are associated (or correlated) with AptarGroup. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AptarGroup has no effect on the direction of CERo Therapeutics i.e., CERo Therapeutics and AptarGroup go up and down completely randomly.

Pair Corralation between CERo Therapeutics and AptarGroup

Assuming the 90 days horizon CERo Therapeutics Holdings is expected to generate 32.84 times more return on investment than AptarGroup. However, CERo Therapeutics is 32.84 times more volatile than AptarGroup. It trades about 0.16 of its potential returns per unit of risk. AptarGroup is currently generating about -0.12 per unit of risk. If you would invest  0.60  in CERo Therapeutics Holdings on September 26, 2024 and sell it today you would earn a total of  0.19  from holding CERo Therapeutics Holdings or generate 31.67% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy95.12%
ValuesDaily Returns

CERo Therapeutics Holdings  vs.  AptarGroup

 Performance 
       Timeline  
CERo Therapeutics 

Risk-Adjusted Performance

11 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in CERo Therapeutics Holdings are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, CERo Therapeutics showed solid returns over the last few months and may actually be approaching a breakup point.
AptarGroup 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in AptarGroup are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, AptarGroup is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

CERo Therapeutics and AptarGroup Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with CERo Therapeutics and AptarGroup

The main advantage of trading using opposite CERo Therapeutics and AptarGroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CERo Therapeutics position performs unexpectedly, AptarGroup 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 AptarGroup will offset losses from the drop in AptarGroup's long position.
The idea behind CERo Therapeutics Holdings and AptarGroup 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.

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