Correlation Between Catalyst Pharmaceuticals and Abcellera Biologics
Can any of the company-specific risk be diversified away by investing in both Catalyst Pharmaceuticals and Abcellera Biologics 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 Pharmaceuticals and Abcellera Biologics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Catalyst Pharmaceuticals and Abcellera Biologics, you can compare the effects of market volatilities on Catalyst Pharmaceuticals and Abcellera Biologics 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 Pharmaceuticals with a short position of Abcellera Biologics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst Pharmaceuticals and Abcellera Biologics.
Diversification Opportunities for Catalyst Pharmaceuticals and Abcellera Biologics
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Catalyst and Abcellera is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Catalyst Pharmaceuticals and Abcellera Biologics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abcellera Biologics and Catalyst 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 Catalyst Pharmaceuticals are associated (or correlated) with Abcellera Biologics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abcellera Biologics has no effect on the direction of Catalyst Pharmaceuticals i.e., Catalyst Pharmaceuticals and Abcellera Biologics go up and down completely randomly.
Pair Corralation between Catalyst Pharmaceuticals and Abcellera Biologics
Given the investment horizon of 90 days Catalyst Pharmaceuticals is expected to generate 0.47 times more return on investment than Abcellera Biologics. However, Catalyst Pharmaceuticals is 2.15 times less risky than Abcellera Biologics. It trades about -0.03 of its potential returns per unit of risk. Abcellera Biologics is currently generating about -0.02 per unit of risk. If you would invest 2,186 in Catalyst Pharmaceuticals on August 27, 2024 and sell it today you would lose (38.00) from holding Catalyst Pharmaceuticals or give up 1.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Catalyst Pharmaceuticals vs. Abcellera Biologics
Performance |
| Timeline |
| Catalyst Pharmaceuticals |
| Abcellera Biologics |
Catalyst Pharmaceuticals and Abcellera Biologics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catalyst Pharmaceuticals and Abcellera Biologics
The main advantage of trading using opposite Catalyst Pharmaceuticals and Abcellera Biologics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalyst Pharmaceuticals position performs unexpectedly, Abcellera Biologics 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 Abcellera Biologics will offset losses from the drop in Abcellera Biologics' long position.| Catalyst Pharmaceuticals vs. Eliem Therapeutics | Catalyst Pharmaceuticals vs. HCW Biologics | Catalyst Pharmaceuticals vs. Scpharmaceuticals | Catalyst Pharmaceuticals vs. Milestone Pharmaceuticals |
| Abcellera Biologics vs. Hepion Pharmaceuticals | Abcellera Biologics vs. Krystal Biotech | Abcellera Biologics vs. CureVac NV | Abcellera Biologics vs. Vir Biotechnology |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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