Correlation Between Amylyx Pharmaceuticals and Pasithea Therapeutics
Can any of the company-specific risk be diversified away by investing in both Amylyx Pharmaceuticals and Pasithea 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 Amylyx Pharmaceuticals and Pasithea Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amylyx Pharmaceuticals and Pasithea Therapeutics Corp, you can compare the effects of market volatilities on Amylyx Pharmaceuticals and Pasithea 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 Amylyx Pharmaceuticals with a short position of Pasithea Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amylyx Pharmaceuticals and Pasithea Therapeutics.
Diversification Opportunities for Amylyx Pharmaceuticals and Pasithea Therapeutics
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Amylyx and Pasithea is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Amylyx Pharmaceuticals and Pasithea Therapeutics Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pasithea Therapeutics and Amylyx Pharmaceuticals 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 Amylyx Pharmaceuticals are associated (or correlated) with Pasithea Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pasithea Therapeutics has no effect on the direction of Amylyx Pharmaceuticals i.e., Amylyx Pharmaceuticals and Pasithea Therapeutics go up and down completely randomly.
Pair Corralation between Amylyx Pharmaceuticals and Pasithea Therapeutics
Given the investment horizon of 90 days Amylyx Pharmaceuticals is expected to generate 1.63 times more return on investment than Pasithea Therapeutics. However, Amylyx Pharmaceuticals is 1.63 times more volatile than Pasithea Therapeutics Corp. It trades about 0.13 of its potential returns per unit of risk. Pasithea Therapeutics Corp is currently generating about -0.31 per unit of risk. If you would invest 453.00 in Amylyx Pharmaceuticals on August 23, 2024 and sell it today you would earn a total of 66.00 from holding Amylyx Pharmaceuticals or generate 14.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amylyx Pharmaceuticals vs. Pasithea Therapeutics Corp
Performance |
| Timeline |
| Amylyx Pharmaceuticals |
| Pasithea Therapeutics |
Amylyx Pharmaceuticals and Pasithea Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amylyx Pharmaceuticals and Pasithea Therapeutics
The main advantage of trading using opposite Amylyx Pharmaceuticals and Pasithea Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amylyx Pharmaceuticals position performs unexpectedly, Pasithea 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 Pasithea Therapeutics will offset losses from the drop in Pasithea Therapeutics' long position.| Amylyx Pharmaceuticals vs. Terns Pharmaceuticals | Amylyx Pharmaceuticals vs. Acumen Pharmaceuticals | Amylyx Pharmaceuticals vs. Inozyme Pharma | Amylyx Pharmaceuticals vs. X4 Pharmaceuticals |
| Pasithea Therapeutics vs. ZyVersa Therapeutics | Pasithea Therapeutics vs. Sonnet Biotherapeutics Holdings | Pasithea Therapeutics vs. Zura Bio Limited | Pasithea Therapeutics vs. Phio Pharmaceuticals Corp |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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