Correlation Between Catalyst Pharmaceuticals and Bright Scholar
Can any of the company-specific risk be diversified away by investing in both Catalyst Pharmaceuticals and Bright Scholar 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 Bright Scholar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Catalyst Pharmaceuticals and Bright Scholar Education, you can compare the effects of market volatilities on Catalyst Pharmaceuticals and Bright Scholar 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 Bright Scholar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst Pharmaceuticals and Bright Scholar.
Diversification Opportunities for Catalyst Pharmaceuticals and Bright Scholar
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Catalyst and Bright is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Catalyst Pharmaceuticals and Bright Scholar Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bright Scholar Education 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 Bright Scholar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bright Scholar Education has no effect on the direction of Catalyst Pharmaceuticals i.e., Catalyst Pharmaceuticals and Bright Scholar go up and down completely randomly.
Pair Corralation between Catalyst Pharmaceuticals and Bright Scholar
Given the investment horizon of 90 days Catalyst Pharmaceuticals is expected to generate 0.75 times more return on investment than Bright Scholar. However, Catalyst Pharmaceuticals is 1.33 times less risky than Bright Scholar. It trades about -0.01 of its potential returns per unit of risk. Bright Scholar Education is currently generating about -0.09 per unit of risk. If you would invest 2,134 in Catalyst Pharmaceuticals on August 24, 2024 and sell it today you would lose (19.00) from holding Catalyst Pharmaceuticals or give up 0.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Catalyst Pharmaceuticals vs. Bright Scholar Education
Performance |
| Timeline |
| Catalyst Pharmaceuticals |
| Bright Scholar Education |
Catalyst Pharmaceuticals and Bright Scholar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catalyst Pharmaceuticals and Bright Scholar
The main advantage of trading using opposite Catalyst Pharmaceuticals and Bright Scholar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalyst Pharmaceuticals position performs unexpectedly, Bright Scholar 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 Bright Scholar will offset losses from the drop in Bright Scholar's long position.| Catalyst Pharmaceuticals vs. Day One Biopharmaceuticals | Catalyst Pharmaceuticals vs. Terns Pharmaceuticals | Catalyst Pharmaceuticals vs. X4 Pharmaceuticals | Catalyst Pharmaceuticals vs. Inozyme Pharma |
| Bright Scholar vs. Laureate Education | Bright Scholar vs. China Liberal Education | Bright Scholar vs. Adtalem Global Education | Bright Scholar vs. Grand Canyon Education |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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