Correlation Between Cerus and Vivos Therapeutics

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

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

Diversification Opportunities for Cerus and Vivos Therapeutics

0.16

Correlation Coefficient

Cerus  Vivos Therapeutics

Average diversification

The 3 months correlation between Cerus and Vivos is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Cerus and Vivos Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vivos Therapeutics and Cerus 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 Cerus are associated (or correlated) with Vivos Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vivos Therapeutics has no effect on the direction of Cerus i.e., Cerus and Vivos Therapeutics go up and down completely randomly.

Pair Corralation between Cerus and Vivos Therapeutics

Given the investment horizon of 90 days Cerus is expected to generate 16.09 times less return on investment than Vivos Therapeutics. But when comparing it to its historical volatility, Cerus is 1.51 times less risky than Vivos Therapeutics. It trades about 0.01 of its potential returns per unit of risk. Vivos Therapeutics is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  215.00  in Vivos Therapeutics on September 21, 2024 and sell it today you would earn a total of  251.00  from holding Vivos Therapeutics or generate 116.74% return on investment over 90 days.

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

Cerus  vs.  Vivos Therapeutics

Cerus

Risk-Adjusted Performance

0 of 100

Very Weak

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

Vivos Therapeutics

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Vivos Therapeutics are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting basic indicators, Vivos Therapeutics unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cerus and Vivos Therapeutics

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

The idea behind Cerus and Vivos Therapeutics 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.