Correlation Between First Robinson and Catalyst Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both First Robinson 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 First Robinson and Catalyst Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Robinson Financial and Catalyst Pharmaceuticals, you can compare the effects of market volatilities on First Robinson 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 First Robinson with a short position of Catalyst Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Robinson and Catalyst Pharmaceuticals.
Diversification Opportunities for First Robinson and Catalyst Pharmaceuticals
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between First and Catalyst is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding First Robinson Financial and Catalyst Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalyst Pharmaceuticals and First Robinson 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 First Robinson Financial 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 First Robinson i.e., First Robinson and Catalyst Pharmaceuticals go up and down completely randomly.
Pair Corralation between First Robinson and Catalyst Pharmaceuticals
Given the investment horizon of 90 days First Robinson is expected to generate 2.47 times less return on investment than Catalyst Pharmaceuticals. In addition to that, First Robinson is 1.03 times more volatile than Catalyst Pharmaceuticals. It trades about 0.01 of its total potential returns per unit of risk. Catalyst Pharmaceuticals is currently generating about 0.02 per unit of volatility. If you would invest 2,043 in Catalyst Pharmaceuticals on October 9, 2024 and sell it today you would lose (24.00) from holding Catalyst Pharmaceuticals or give up 1.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 65.45% |
| Values | Daily Returns |
First Robinson Financial vs. Catalyst Pharmaceuticals
Performance |
| Timeline |
| First Robinson Financial |
| Catalyst Pharmaceuticals |
First Robinson and Catalyst Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Robinson and Catalyst Pharmaceuticals
The main advantage of trading using opposite First Robinson and Catalyst Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Robinson 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.| First Robinson vs. Air Lease | First Robinson vs. Marimaca Copper Corp | First Robinson vs. Fortress Transp Infra | First Robinson vs. Harmony Gold Mining |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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