Correlation Between CERo Therapeutics and Powerbridge Technologies

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

Diversification Opportunities for CERo Therapeutics and Powerbridge Technologies

-0.31

Correlation Coefficient

CERo Therapeutics  Powerbridge Technologies

Very good diversification

The 3 months correlation between CERo and Powerbridge is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding CERo Therapeutics Holdings and Powerbridge Technologies Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Powerbridge Technologies 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 Powerbridge Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Powerbridge Technologies has no effect on the direction of CERo Therapeutics i.e., CERo Therapeutics and Powerbridge Technologies go up and down completely randomly.

Pair Corralation between CERo Therapeutics and Powerbridge Technologies

Assuming the 90 days horizon CERo Therapeutics is expected to generate 2.08 times less return on investment than Powerbridge Technologies. But when comparing it to its historical volatility, CERo Therapeutics Holdings is 2.79 times less risky than Powerbridge Technologies. It trades about 0.08 of its potential returns per unit of risk. Powerbridge Technologies Co is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  330.00  in Powerbridge Technologies Co on September 25, 2024 and sell it today you would lose (300.00) from holding Powerbridge Technologies Co or give up 90.91% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	84.76%
Values	Daily Returns

CERo Therapeutics Holdings  vs.  Powerbridge Technologies Co

CERo Therapeutics

Risk-Adjusted Performance

11 of 100

OK

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 uncertain basic indicators, CERo Therapeutics showed solid returns over the last few months and may actually be approaching a breakup point.

Powerbridge Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Powerbridge Technologies Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Powerbridge Technologies is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with CERo Therapeutics and Powerbridge Technologies

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

The idea behind CERo Therapeutics Holdings and Powerbridge Technologies 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.

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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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.