Correlation Between ENDRA Life and Cerus

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

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

Diversification Opportunities for ENDRA Life and Cerus

-0.29

Correlation Coefficient

ENDRA Life  Cerus

Very good diversification

The 3 months correlation between ENDRA and Cerus is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding ENDRA Life Sciences and Cerus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cerus and ENDRA Life 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 ENDRA Life Sciences are associated (or correlated) with Cerus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cerus has no effect on the direction of ENDRA Life i.e., ENDRA Life and Cerus go up and down completely randomly.

Pair Corralation between ENDRA Life and Cerus

Given the investment horizon of 90 days ENDRA Life Sciences is expected to generate 3.14 times more return on investment than Cerus. However, ENDRA Life is 3.14 times more volatile than Cerus. It trades about 0.04 of its potential returns per unit of risk. Cerus is currently generating about -0.02 per unit of risk. If you would invest  704.00  in ENDRA Life Sciences on September 30, 2024 and sell it today you would lose (74.00) from holding ENDRA Life Sciences or give up 10.51% of portfolio value over 90 days.

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

ENDRA Life Sciences  vs.  Cerus

ENDRA Life Sciences

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ENDRA Life Sciences are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, ENDRA Life sustained solid returns over the last few months and may actually be approaching a breakup point.

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 recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with ENDRA Life and Cerus

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

The idea behind ENDRA Life Sciences and Cerus 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.