Correlation Between Corning Incorporated and CERo Therapeutics

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

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

Diversification Opportunities for Corning Incorporated and CERo Therapeutics

0.32

Correlation Coefficient

Corning Incorporated  CERo Therapeutics

Weak diversification

The 3 months correlation between Corning and CERo is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Corning Incorporated and CERo Therapeutics Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CERo Therapeutics and Corning Incorporated 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 Corning Incorporated 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 Corning Incorporated i.e., Corning Incorporated and CERo Therapeutics go up and down completely randomly.

Pair Corralation between Corning Incorporated and CERo Therapeutics

Considering the 90-day investment horizon Corning Incorporated is expected to generate 29.56 times less return on investment than CERo Therapeutics. But when comparing it to its historical volatility, Corning Incorporated is 9.4 times less risky than CERo Therapeutics. It trades about 0.04 of its potential returns per unit of risk. CERo Therapeutics Holdings is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  0.90  in CERo Therapeutics Holdings on December 20, 2024 and sell it today you would earn a total of  0.34  from holding CERo Therapeutics Holdings or generate 37.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	96.67%
Values	Daily Returns

Corning Incorporated  vs.  CERo Therapeutics Holdings

Corning Incorporated

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Corning Incorporated are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable essential indicators, Corning Incorporated is not utilizing all of its potentials. The newest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

CERo Therapeutics

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CERo Therapeutics Holdings are ranked lower than 9 (%) 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.

Pair Trading with Corning Incorporated and CERo Therapeutics

The main advantage of trading using opposite Corning Incorporated and CERo Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Corning Incorporated 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 Corning Incorporated 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.

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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.