Correlation Between CERo Therapeutics and Mytilineos

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

Diversification Opportunities for CERo Therapeutics and Mytilineos

-0.58

Correlation Coefficient

CERo Therapeutics  Mytilineos

Excellent diversification

The 3 months correlation between CERo and Mytilineos is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding CERo Therapeutics Holdings and Mytilineos SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mytilineos SA 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 Mytilineos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mytilineos SA has no effect on the direction of CERo Therapeutics i.e., CERo Therapeutics and Mytilineos go up and down completely randomly.

Pair Corralation between CERo Therapeutics and Mytilineos

Assuming the 90 days horizon CERo Therapeutics Holdings is expected to under-perform the Mytilineos. In addition to that, CERo Therapeutics is 73.32 times more volatile than Mytilineos SA. It trades about -0.01 of its total potential returns per unit of risk. Mytilineos SA is currently generating about -0.08 per unit of volatility. If you would invest  3,261  in Mytilineos SA on September 29, 2024 and sell it today you would lose (19.00) from holding Mytilineos SA or give up 0.58% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

CERo Therapeutics Holdings  vs.  Mytilineos SA

CERo Therapeutics

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CERo Therapeutics Holdings are ranked lower than 13 (%) 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.

Mytilineos SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mytilineos SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's technical indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with CERo Therapeutics and Mytilineos

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

The idea behind CERo Therapeutics Holdings and Mytilineos SA 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.

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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.