Correlation Between CERo Therapeutics and Statera Biopharma

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

Diversification Opportunities for CERo Therapeutics and Statera Biopharma

-0.04

Correlation Coefficient

CERo Therapeutics  Statera Biopharma

Good diversification

The 3 months correlation between CERo and Statera is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding CERo Therapeutics Holdings and Statera Biopharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Statera Biopharma 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 Statera Biopharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Statera Biopharma has no effect on the direction of CERo Therapeutics i.e., CERo Therapeutics and Statera Biopharma go up and down completely randomly.

Pair Corralation between CERo Therapeutics and Statera Biopharma

If you would invest  2.31  in CERo Therapeutics Holdings on October 22, 2024 and sell it today you would lose (0.77) from holding CERo Therapeutics Holdings or give up 33.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	2.5%
Values	Daily Returns

CERo Therapeutics Holdings  vs.  Statera Biopharma

CERo Therapeutics

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CERo Therapeutics Holdings are ranked lower than 14 (%) 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.

Statera Biopharma

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Statera Biopharma has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Statera Biopharma is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with CERo Therapeutics and Statera Biopharma

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

The idea behind CERo Therapeutics Holdings and Statera Biopharma 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..