Correlation Between Monopar Therapeutics and Catalyst Biosciences
Can any of the company-specific risk be diversified away by investing in both Monopar Therapeutics and Catalyst Biosciences 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 Monopar Therapeutics and Catalyst Biosciences into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Monopar Therapeutics and Catalyst Biosciences, you can compare the effects of market volatilities on Monopar Therapeutics and Catalyst Biosciences 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 Monopar Therapeutics with a short position of Catalyst Biosciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monopar Therapeutics and Catalyst Biosciences.
Diversification Opportunities for Monopar Therapeutics and Catalyst Biosciences
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Monopar and Catalyst is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Monopar Therapeutics and Catalyst Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalyst Biosciences and Monopar 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 Monopar Therapeutics are associated (or correlated) with Catalyst Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalyst Biosciences has no effect on the direction of Monopar Therapeutics i.e., Monopar Therapeutics and Catalyst Biosciences go up and down completely randomly.
Pair Corralation between Monopar Therapeutics and Catalyst Biosciences
Given the investment horizon of 90 days Monopar Therapeutics is expected to generate 1.06 times less return on investment than Catalyst Biosciences. In addition to that, Monopar Therapeutics is 4.75 times more volatile than Catalyst Biosciences. It trades about 0.06 of its total potential returns per unit of risk. Catalyst Biosciences is currently generating about 0.3 per unit of volatility. If you would invest 23.00 in Catalyst Biosciences on September 1, 2024 and sell it today you would earn a total of 18.00 from holding Catalyst Biosciences or generate 78.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 8.33% |
| Values | Daily Returns |
Monopar Therapeutics vs. Catalyst Biosciences
Performance |
| Timeline |
| Monopar Therapeutics |
| Catalyst Biosciences |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Monopar Therapeutics and Catalyst Biosciences Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Monopar Therapeutics and Catalyst Biosciences
The main advantage of trading using opposite Monopar Therapeutics and Catalyst Biosciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monopar Therapeutics position performs unexpectedly, Catalyst Biosciences 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 Biosciences will offset losses from the drop in Catalyst Biosciences' long position.| Monopar Therapeutics vs. Cue Biopharma | Monopar Therapeutics vs. Tff Pharmaceuticals | Monopar Therapeutics vs. Lantern Pharma | Monopar Therapeutics vs. Eliem Therapeutics |
| Catalyst Biosciences vs. Akari Therapeutics PLC | Catalyst Biosciences vs. Benitec Biopharma Ltd | Catalyst Biosciences vs. Pulmatrix |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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