Correlation Between Modular Medical and Cerberus Cyber

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

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

Diversification Opportunities for Modular Medical and Cerberus Cyber

0.15

Correlation Coefficient

Modular Medical  Cerberus Cyber

Average diversification

The 3 months correlation between Modular and Cerberus is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Modular Medical and Cerberus Cyber Sentinel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cerberus Cyber Sentinel and Modular Medical 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 Modular Medical are associated (or correlated) with Cerberus Cyber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cerberus Cyber Sentinel has no effect on the direction of Modular Medical i.e., Modular Medical and Cerberus Cyber go up and down completely randomly.

Pair Corralation between Modular Medical and Cerberus Cyber

Given the investment horizon of 90 days Modular Medical is expected to under-perform the Cerberus Cyber. But the stock apears to be less risky and, when comparing its historical volatility, Modular Medical is 1.98 times less risky than Cerberus Cyber. The stock trades about -0.09 of its potential returns per unit of risk. The Cerberus Cyber Sentinel is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  138.00  in Cerberus Cyber Sentinel on May 11, 2025 and sell it today you would lose (44.00) from holding Cerberus Cyber Sentinel or give up 31.88% of portfolio value over 90 days.

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

Modular Medical  vs.  Cerberus Cyber Sentinel

Modular Medical

Risk-Adjusted Performance

Weakest

Over the last 90 days Modular Medical has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in September 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Cerberus Cyber Sentinel

Risk-Adjusted Performance

Weakest

Over the last 90 days Cerberus Cyber Sentinel has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Modular Medical and Cerberus Cyber

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

The idea behind Modular Medical and Cerberus Cyber Sentinel 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .