Correlation Between Catalyst Pharmaceuticals and CEZ A
Can any of the company-specific risk be diversified away by investing in both Catalyst Pharmaceuticals and CEZ A 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 CEZ A into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Catalyst Pharmaceuticals and CEZ A S, you can compare the effects of market volatilities on Catalyst Pharmaceuticals and CEZ A 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 CEZ A. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst Pharmaceuticals and CEZ A.
Diversification Opportunities for Catalyst Pharmaceuticals and CEZ A
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Catalyst and CEZ is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Catalyst Pharmaceuticals and CEZ A S in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CEZ A S 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 CEZ A. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CEZ A S has no effect on the direction of Catalyst Pharmaceuticals i.e., Catalyst Pharmaceuticals and CEZ A go up and down completely randomly.
Pair Corralation between Catalyst Pharmaceuticals and CEZ A
Given the investment horizon of 90 days Catalyst Pharmaceuticals is expected to generate 1.81 times more return on investment than CEZ A. However, Catalyst Pharmaceuticals is 1.81 times more volatile than CEZ A S. It trades about 0.08 of its potential returns per unit of risk. CEZ A S is currently generating about -0.09 per unit of risk. If you would invest 1,381 in Catalyst Pharmaceuticals on September 4, 2024 and sell it today you would earn a total of 790.00 from holding Catalyst Pharmaceuticals or generate 57.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 55.47% |
| Values | Daily Returns |
Catalyst Pharmaceuticals vs. CEZ A S
Performance |
| Timeline |
| Catalyst Pharmaceuticals |
| CEZ A S |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Catalyst Pharmaceuticals and CEZ A Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catalyst Pharmaceuticals and CEZ A
The main advantage of trading using opposite Catalyst Pharmaceuticals and CEZ A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalyst Pharmaceuticals position performs unexpectedly, CEZ A 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 CEZ A will offset losses from the drop in CEZ A's long position.| Catalyst Pharmaceuticals vs. Day One Biopharmaceuticals | Catalyst Pharmaceuticals vs. Terns Pharmaceuticals | Catalyst Pharmaceuticals vs. X4 Pharmaceuticals | Catalyst Pharmaceuticals vs. Inozyme Pharma |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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