Correlation Between Senti Biosciences and Pasithea Therapeutics

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Can any of the company-specific risk be diversified away by investing in both Senti Biosciences and Pasithea Therapeutics 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 Senti Biosciences and Pasithea Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Senti Biosciences and Pasithea Therapeutics Corp, you can compare the effects of market volatilities on Senti Biosciences and Pasithea Therapeutics 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 Senti Biosciences with a short position of Pasithea Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Senti Biosciences and Pasithea Therapeutics.

Diversification Opportunities for Senti Biosciences and Pasithea Therapeutics

SentiPasitheaDiversified AwaySentiPasitheaDiversified Away100%
-0.07
  Correlation Coefficient

Good diversification

The 3 months correlation between Senti and Pasithea is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Senti Biosciences and Pasithea Therapeutics Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pasithea Therapeutics and Senti Biosciences 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 Senti Biosciences are associated (or correlated) with Pasithea Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pasithea Therapeutics has no effect on the direction of Senti Biosciences i.e., Senti Biosciences and Pasithea Therapeutics go up and down completely randomly.

Pair Corralation between Senti Biosciences and Pasithea Therapeutics

Given the investment horizon of 90 days Senti Biosciences is expected to generate 0.54 times more return on investment than Pasithea Therapeutics. However, Senti Biosciences is 1.86 times less risky than Pasithea Therapeutics. It trades about -0.12 of its potential returns per unit of risk. Pasithea Therapeutics Corp is currently generating about -0.29 per unit of risk. If you would invest  452.00  in Senti Biosciences on November 27, 2024 and sell it today you would lose (67.00) from holding Senti Biosciences or give up 14.82% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy95.24%
ValuesDaily Returns

Senti Biosciences  vs.  Pasithea Therapeutics Corp

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb 0100200300
JavaScript chart by amCharts 3.21.15SNTI KTTA
       Timeline  
Senti Biosciences 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Senti Biosciences are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating basic indicators, Senti Biosciences demonstrated solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb246810121416
Pasithea Therapeutics 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Pasithea Therapeutics Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite abnormal performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for the company investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb1.522.533.5

Senti Biosciences and Pasithea Therapeutics Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-141.29-105.82-70.35-34.88-0.5935.3572.57109.79147.0184.22 0.0020.0040.0060.008
JavaScript chart by amCharts 3.21.15SNTI KTTA
       Returns  

Pair Trading with Senti Biosciences and Pasithea Therapeutics

The main advantage of trading using opposite Senti Biosciences and Pasithea Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Senti Biosciences position performs unexpectedly, Pasithea Therapeutics 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 Pasithea Therapeutics will offset losses from the drop in Pasithea Therapeutics' long position.
The idea behind Senti Biosciences and Pasithea Therapeutics Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.

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