Correlation Between Dalata Hotel and CERo Therapeutics

Can any of the company-specific risk be diversified away by investing in both Dalata Hotel and CERo Therapeutics 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 Dalata Hotel and CERo Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Dalata Hotel Group and CERo Therapeutics Holdings, you can compare the effects of market volatilities on Dalata Hotel and CERo Therapeutics 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 Dalata Hotel with a short position of CERo Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dalata Hotel and CERo Therapeutics.

Diversification Opportunities for Dalata Hotel and CERo Therapeutics

0.0

Correlation Coefficient

Dalata Hotel  CERo Therapeutics

Pay attention - limited upside

The 3 months correlation between Dalata and CERo is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Dalata Hotel Group and CERo Therapeutics Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CERo Therapeutics and Dalata Hotel 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 Dalata Hotel Group are associated (or correlated) with CERo Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CERo Therapeutics has no effect on the direction of Dalata Hotel i.e., Dalata Hotel and CERo Therapeutics go up and down completely randomly.

Pair Corralation between Dalata Hotel and CERo Therapeutics

If you would invest  1.27  in CERo Therapeutics Holdings on October 5, 2024 and sell it today you would lose (0.37) from holding CERo Therapeutics Holdings or give up 29.13% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Dalata Hotel Group  vs.  CERo Therapeutics Holdings

Dalata Hotel Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dalata Hotel Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Dalata Hotel is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

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

Pair Trading with Dalata Hotel and CERo Therapeutics

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

The idea behind Dalata Hotel Group and CERo Therapeutics Holdings 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.