Correlation Between CERo Therapeutics and Marui Group

Can any of the company-specific risk be diversified away by investing in both CERo Therapeutics and Marui Group 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 Marui Group 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 Marui Group Co, you can compare the effects of market volatilities on CERo Therapeutics and Marui Group 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 Marui Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of CERo Therapeutics and Marui Group.

Diversification Opportunities for CERo Therapeutics and Marui Group

-0.35

Correlation Coefficient

CERo Therapeutics  Marui Group

Very good diversification

The 3 months correlation between CERo and Marui is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding CERo Therapeutics Holdings and Marui Group Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marui Group 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 Marui Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marui Group has no effect on the direction of CERo Therapeutics i.e., CERo Therapeutics and Marui Group go up and down completely randomly.

Pair Corralation between CERo Therapeutics and Marui Group

Assuming the 90 days horizon CERo Therapeutics Holdings is expected to under-perform the Marui Group. In addition to that, CERo Therapeutics is 3.77 times more volatile than Marui Group Co. It trades about -0.03 of its total potential returns per unit of risk. Marui Group Co is currently generating about 0.13 per unit of volatility. If you would invest  2,921  in Marui Group Co on September 27, 2024 and sell it today you would earn a total of  449.00  from holding Marui Group Co or generate 15.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

CERo Therapeutics Holdings  vs.  Marui Group Co

CERo Therapeutics

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CERo Therapeutics Holdings are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, CERo Therapeutics showed solid returns over the last few months and may actually be approaching a breakup point.

Marui Group

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Marui Group Co are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Marui Group showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CERo Therapeutics and Marui Group

The main advantage of trading using opposite CERo Therapeutics and Marui Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CERo Therapeutics position performs unexpectedly, Marui Group 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 Marui Group will offset losses from the drop in Marui Group's long position.

The idea behind CERo Therapeutics Holdings and Marui Group Co 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.