Correlation Between Catalyst Pharmaceuticals and Regulus Therapeutics
Can any of the company-specific risk be diversified away by investing in both Catalyst Pharmaceuticals and Regulus Therapeutics 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 Regulus Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Catalyst Pharmaceuticals and Regulus Therapeutics, you can compare the effects of market volatilities on Catalyst Pharmaceuticals and Regulus Therapeutics 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 Regulus Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst Pharmaceuticals and Regulus Therapeutics.
Diversification Opportunities for Catalyst Pharmaceuticals and Regulus Therapeutics
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Catalyst and Regulus is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Catalyst Pharmaceuticals and Regulus Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regulus Therapeutics 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 Regulus Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regulus Therapeutics has no effect on the direction of Catalyst Pharmaceuticals i.e., Catalyst Pharmaceuticals and Regulus Therapeutics go up and down completely randomly.
Pair Corralation between Catalyst Pharmaceuticals and Regulus Therapeutics
Given the investment horizon of 90 days Catalyst Pharmaceuticals is expected to generate 0.5 times more return on investment than Regulus Therapeutics. However, Catalyst Pharmaceuticals is 2.0 times less risky than Regulus Therapeutics. It trades about 0.13 of its potential returns per unit of risk. Regulus Therapeutics is currently generating about -0.04 per unit of risk. If you would invest 1,631 in Catalyst Pharmaceuticals on September 3, 2024 and sell it today you would earn a total of 622.00 from holding Catalyst Pharmaceuticals or generate 38.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Catalyst Pharmaceuticals vs. Regulus Therapeutics
Performance |
| Timeline |
| Catalyst Pharmaceuticals |
| Regulus Therapeutics |
Catalyst Pharmaceuticals and Regulus Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catalyst Pharmaceuticals and Regulus Therapeutics
The main advantage of trading using opposite Catalyst Pharmaceuticals and Regulus Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalyst Pharmaceuticals position performs unexpectedly, Regulus Therapeutics 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 Regulus Therapeutics will offset losses from the drop in Regulus Therapeutics' long position.| Catalyst Pharmaceuticals vs. Day One Biopharmaceuticals | Catalyst Pharmaceuticals vs. Terns Pharmaceuticals | Catalyst Pharmaceuticals vs. X4 Pharmaceuticals | Catalyst Pharmaceuticals vs. Inozyme Pharma |
| Regulus Therapeutics vs. Tenax Therapeutics | Regulus Therapeutics vs. Verastem | Regulus Therapeutics vs. Pulmatrix | Regulus Therapeutics vs. Cellectar Biosciences |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |