Correlation Between Catalyst Biosciences and Rezolute
Can any of the company-specific risk be diversified away by investing in both Catalyst Biosciences and Rezolute 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 Rezolute into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Catalyst Biosciences and Rezolute, you can compare the effects of market volatilities on Catalyst Biosciences and Rezolute 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 Rezolute. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst Biosciences and Rezolute.
Diversification Opportunities for Catalyst Biosciences and Rezolute
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Catalyst and Rezolute is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Catalyst Biosciences and Rezolute in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rezolute 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 Rezolute. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rezolute has no effect on the direction of Catalyst Biosciences i.e., Catalyst Biosciences and Rezolute go up and down completely randomly.
Pair Corralation between Catalyst Biosciences and Rezolute
Given the investment horizon of 90 days Catalyst Biosciences is expected to generate 1.07 times less return on investment than Rezolute. In addition to that, Catalyst Biosciences is 1.1 times more volatile than Rezolute. It trades about 0.06 of its total potential returns per unit of risk. Rezolute is currently generating about 0.07 per unit of volatility. If you would invest 161.00 in Rezolute on August 29, 2024 and sell it today you would earn a total of 318.00 from holding Rezolute or generate 197.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 31.52% |
| Values | Daily Returns |
Catalyst Biosciences vs. Rezolute
Performance |
| Timeline |
| Catalyst Biosciences |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Rezolute |
Catalyst Biosciences and Rezolute Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catalyst Biosciences and Rezolute
The main advantage of trading using opposite Catalyst Biosciences and Rezolute positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalyst Biosciences position performs unexpectedly, Rezolute 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 Rezolute will offset losses from the drop in Rezolute's long position.| Catalyst Biosciences vs. Akari Therapeutics PLC | Catalyst Biosciences vs. Benitec Biopharma Ltd | Catalyst Biosciences vs. Pulmatrix |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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