Correlation Between Flexible Solutions and Catalyst Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Flexible Solutions 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 Flexible Solutions and Catalyst Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flexible Solutions International and Catalyst Pharmaceuticals, you can compare the effects of market volatilities on Flexible Solutions 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 Flexible Solutions with a short position of Catalyst Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flexible Solutions and Catalyst Pharmaceuticals.
Diversification Opportunities for Flexible Solutions and Catalyst Pharmaceuticals
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Flexible and Catalyst is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Flexible Solutions Internation and Catalyst Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalyst Pharmaceuticals and Flexible Solutions 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 Flexible Solutions International 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 Flexible Solutions i.e., Flexible Solutions and Catalyst Pharmaceuticals go up and down completely randomly.
Pair Corralation between Flexible Solutions and Catalyst Pharmaceuticals
Considering the 90-day investment horizon Flexible Solutions International is expected to generate 1.1 times more return on investment than Catalyst Pharmaceuticals. However, Flexible Solutions is 1.1 times more volatile than Catalyst Pharmaceuticals. It trades about 0.03 of its potential returns per unit of risk. Catalyst Pharmaceuticals is currently generating about 0.03 per unit of risk. If you would invest 334.00 in Flexible Solutions International on September 3, 2024 and sell it today you would earn a total of 81.00 from holding Flexible Solutions International or generate 24.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Flexible Solutions Internation vs. Catalyst Pharmaceuticals
Performance |
| Timeline |
| Flexible Solutions |
| Catalyst Pharmaceuticals |
Flexible Solutions and Catalyst Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flexible Solutions and Catalyst Pharmaceuticals
The main advantage of trading using opposite Flexible Solutions and Catalyst Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flexible Solutions 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.| Flexible Solutions vs. SPACE | Flexible Solutions vs. Bayview Acquisition Corp | Flexible Solutions vs. T Rowe Price | Flexible Solutions vs. Ampleforth |
| 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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