Correlation Between Catalyst Pharmaceuticals and Valneva SE
Can any of the company-specific risk be diversified away by investing in both Catalyst Pharmaceuticals and Valneva SE 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 Valneva SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Catalyst Pharmaceuticals and Valneva SE ADR, you can compare the effects of market volatilities on Catalyst Pharmaceuticals and Valneva SE 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 Valneva SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst Pharmaceuticals and Valneva SE.
Diversification Opportunities for Catalyst Pharmaceuticals and Valneva SE
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Catalyst and Valneva is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Catalyst Pharmaceuticals and Valneva SE ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valneva SE ADR 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 Valneva SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valneva SE ADR has no effect on the direction of Catalyst Pharmaceuticals i.e., Catalyst Pharmaceuticals and Valneva SE go up and down completely randomly.
Pair Corralation between Catalyst Pharmaceuticals and Valneva SE
Given the investment horizon of 90 days Catalyst Pharmaceuticals is expected to generate 0.71 times more return on investment than Valneva SE. However, Catalyst Pharmaceuticals is 1.4 times less risky than Valneva SE. It trades about 0.05 of its potential returns per unit of risk. Valneva SE ADR is currently generating about -0.01 per unit of risk. If you would invest 1,463 in Catalyst Pharmaceuticals on December 1, 2024 and sell it today you would earn a total of 826.00 from holding Catalyst Pharmaceuticals or generate 56.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Catalyst Pharmaceuticals vs. Valneva SE ADR
Performance |
| Timeline |
| Catalyst Pharmaceuticals |
| Valneva SE ADR |
Catalyst Pharmaceuticals and Valneva SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catalyst Pharmaceuticals and Valneva SE
The main advantage of trading using opposite Catalyst Pharmaceuticals and Valneva SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalyst Pharmaceuticals position performs unexpectedly, Valneva SE 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 Valneva SE will offset losses from the drop in Valneva SE's long position.| Catalyst Pharmaceuticals vs. Day One Biopharmaceuticals | ||
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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 CEOs Directory module to screen CEOs from public companies around the world.
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