Correlation Between Dennys Corp and Catalyst Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Dennys Corp and Catalyst Pharmaceuticals 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 Dennys Corp and Catalyst Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dennys Corp and Catalyst Pharmaceuticals, you can compare the effects of market volatilities on Dennys Corp and Catalyst Pharmaceuticals 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 Dennys Corp with a short position of Catalyst Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dennys Corp and Catalyst Pharmaceuticals.
Diversification Opportunities for Dennys Corp and Catalyst Pharmaceuticals
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dennys and Catalyst is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Dennys Corp and Catalyst Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalyst Pharmaceuticals and Dennys Corp 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 Dennys Corp are associated (or correlated) with Catalyst Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalyst Pharmaceuticals has no effect on the direction of Dennys Corp i.e., Dennys Corp and Catalyst Pharmaceuticals go up and down completely randomly.
Pair Corralation between Dennys Corp and Catalyst Pharmaceuticals
Given the investment horizon of 90 days Dennys Corp is expected to under-perform the Catalyst Pharmaceuticals. In addition to that, Dennys Corp is 1.29 times more volatile than Catalyst Pharmaceuticals. It trades about -0.04 of its total potential returns per unit of risk. Catalyst Pharmaceuticals is currently generating about 0.09 per unit of volatility. If you would invest 1,539 in Catalyst Pharmaceuticals on October 12, 2024 and sell it today you would earn a total of 741.00 from holding Catalyst Pharmaceuticals or generate 48.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dennys Corp vs. Catalyst Pharmaceuticals
Performance |
| Timeline |
| Dennys Corp |
| Catalyst Pharmaceuticals |
Dennys Corp and Catalyst Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dennys Corp and Catalyst Pharmaceuticals
The main advantage of trading using opposite Dennys Corp and Catalyst Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dennys Corp position performs unexpectedly, Catalyst Pharmaceuticals 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 Catalyst Pharmaceuticals will offset losses from the drop in Catalyst Pharmaceuticals' long position.| Dennys Corp vs. Brinker International | Dennys Corp vs. Bloomin Brands | Dennys Corp vs. Jack In The | Dennys Corp vs. BJs Restaurants |
| 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |