Correlation Between Catalyst Biosciences and Micro-Mechanics (Holdings)
Can any of the company-specific risk be diversified away by investing in both Catalyst Biosciences and Micro-Mechanics (Holdings) 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 Catalyst Biosciences and Micro-Mechanics (Holdings) into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Catalyst Biosciences and Micro Mechanics, you can compare the effects of market volatilities on Catalyst Biosciences and Micro-Mechanics (Holdings) 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 Catalyst Biosciences with a short position of Micro-Mechanics (Holdings). Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst Biosciences and Micro-Mechanics (Holdings).
Diversification Opportunities for Catalyst Biosciences and Micro-Mechanics (Holdings)
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Catalyst and Micro-Mechanics is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Catalyst Biosciences and Micro Mechanics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Micro-Mechanics (Holdings) and Catalyst Biosciences 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 Catalyst Biosciences are associated (or correlated) with Micro-Mechanics (Holdings). Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Micro-Mechanics (Holdings) has no effect on the direction of Catalyst Biosciences i.e., Catalyst Biosciences and Micro-Mechanics (Holdings) go up and down completely randomly.
Pair Corralation between Catalyst Biosciences and Micro-Mechanics (Holdings)
If you would invest 99.00 in Micro Mechanics on August 30, 2024 and sell it today you would earn a total of 18.00 from holding Micro Mechanics or generate 18.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 2.33% |
| Values | Daily Returns |
Catalyst Biosciences vs. Micro Mechanics
Performance |
| Timeline |
| Catalyst Biosciences |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Micro-Mechanics (Holdings) |
Catalyst Biosciences and Micro-Mechanics (Holdings) Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catalyst Biosciences and Micro-Mechanics (Holdings)
The main advantage of trading using opposite Catalyst Biosciences and Micro-Mechanics (Holdings) positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalyst Biosciences position performs unexpectedly, Micro-Mechanics (Holdings) 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 Micro-Mechanics (Holdings) will offset losses from the drop in Micro-Mechanics (Holdings)'s long position.| Catalyst Biosciences vs. Akari Therapeutics PLC | Catalyst Biosciences vs. Benitec Biopharma Ltd | Catalyst Biosciences vs. Pulmatrix |
| Micro-Mechanics (Holdings) vs. ASML Holding NV | Micro-Mechanics (Holdings) vs. ASML Holding NV | Micro-Mechanics (Holdings) vs. Applied Materials | Micro-Mechanics (Holdings) vs. Lam Research 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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