Correlation Between Pasithea Therapeutics and Check Cap
Can any of the company-specific risk be diversified away by investing in both Pasithea Therapeutics and Check Cap 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 Pasithea Therapeutics and Check Cap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pasithea Therapeutics Corp and Check Cap, you can compare the effects of market volatilities on Pasithea Therapeutics and Check Cap 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 Pasithea Therapeutics with a short position of Check Cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pasithea Therapeutics and Check Cap.
Diversification Opportunities for Pasithea Therapeutics and Check Cap
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pasithea and Check is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Pasithea Therapeutics Corp and Check Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Check Cap and Pasithea Therapeutics 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 Pasithea Therapeutics Corp are associated (or correlated) with Check Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Check Cap has no effect on the direction of Pasithea Therapeutics i.e., Pasithea Therapeutics and Check Cap go up and down completely randomly.
Pair Corralation between Pasithea Therapeutics and Check Cap
Assuming the 90 days horizon Pasithea Therapeutics Corp is expected to generate 1.07 times more return on investment than Check Cap. However, Pasithea Therapeutics is 1.07 times more volatile than Check Cap. It trades about -0.05 of its potential returns per unit of risk. Check Cap is currently generating about -0.32 per unit of risk. If you would invest 2.12 in Pasithea Therapeutics Corp on August 28, 2024 and sell it today you would lose (0.09) from holding Pasithea Therapeutics Corp or give up 4.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 50.0% |
| Values | Daily Returns |
Pasithea Therapeutics Corp vs. Check Cap
Performance |
| Timeline |
| Pasithea Therapeutics |
| Check Cap |
Pasithea Therapeutics and Check Cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pasithea Therapeutics and Check Cap
The main advantage of trading using opposite Pasithea Therapeutics and Check Cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pasithea Therapeutics position performs unexpectedly, Check Cap 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 Check Cap will offset losses from the drop in Check Cap's long position.| Pasithea Therapeutics vs. Eliem Therapeutics | Pasithea Therapeutics vs. Scpharmaceuticals | Pasithea Therapeutics vs. Milestone Pharmaceuticals | Pasithea Therapeutics vs. Seres Therapeutics |
| Check Cap vs. Fonar | Check Cap vs. Burning Rock Biotech | Check Cap vs. Sera Prognostics | Check Cap vs. Psychemedics |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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