Correlation Between Catalyst Pharmaceuticals and Sellas Life
Can any of the company-specific risk be diversified away by investing in both Catalyst Pharmaceuticals and Sellas Life 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 Sellas Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Catalyst Pharmaceuticals and Sellas Life Sciences, you can compare the effects of market volatilities on Catalyst Pharmaceuticals and Sellas Life 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 Sellas Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst Pharmaceuticals and Sellas Life.
Diversification Opportunities for Catalyst Pharmaceuticals and Sellas Life
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Catalyst and Sellas is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Catalyst Pharmaceuticals and Sellas Life Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sellas Life Sciences 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 Sellas Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sellas Life Sciences has no effect on the direction of Catalyst Pharmaceuticals i.e., Catalyst Pharmaceuticals and Sellas Life go up and down completely randomly.
Pair Corralation between Catalyst Pharmaceuticals and Sellas Life
Given the investment horizon of 90 days Catalyst Pharmaceuticals is expected to under-perform the Sellas Life. But the stock apears to be less risky and, when comparing its historical volatility, Catalyst Pharmaceuticals is 1.78 times less risky than Sellas Life. The stock trades about -0.01 of its potential returns per unit of risk. The Sellas Life Sciences is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 112.00 in Sellas Life Sciences on August 24, 2024 and sell it today you would earn a total of 10.00 from holding Sellas Life Sciences or generate 8.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Catalyst Pharmaceuticals vs. Sellas Life Sciences
Performance |
| Timeline |
| Catalyst Pharmaceuticals |
| Sellas Life Sciences |
Catalyst Pharmaceuticals and Sellas Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catalyst Pharmaceuticals and Sellas Life
The main advantage of trading using opposite Catalyst Pharmaceuticals and Sellas Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalyst Pharmaceuticals position performs unexpectedly, Sellas Life 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 Sellas Life will offset losses from the drop in Sellas Life's long position.| Catalyst Pharmaceuticals vs. Day One Biopharmaceuticals | Catalyst Pharmaceuticals vs. Terns Pharmaceuticals | Catalyst Pharmaceuticals vs. X4 Pharmaceuticals | Catalyst Pharmaceuticals vs. Inozyme Pharma |
| Sellas Life vs. Lyra Therapeutics | Sellas Life vs. Hookipa Pharma | Sellas Life vs. Cingulate Warrants | Sellas Life vs. SAB Biotherapeutics |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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