Correlation Between GILEAD and Catalyst Pharmaceuticals
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By analyzing existing cross correlation between GILEAD SCIENCES INC and Catalyst Pharmaceuticals, you can compare the effects of market volatilities on GILEAD 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 GILEAD with a short position of Catalyst Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of GILEAD and Catalyst Pharmaceuticals.
Diversification Opportunities for GILEAD and Catalyst Pharmaceuticals
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GILEAD and Catalyst is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding GILEAD SCIENCES INC and Catalyst Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalyst Pharmaceuticals and GILEAD 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 GILEAD SCIENCES INC 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 GILEAD i.e., GILEAD and Catalyst Pharmaceuticals go up and down completely randomly.
Pair Corralation between GILEAD and Catalyst Pharmaceuticals
Assuming the 90 days trading horizon GILEAD is expected to generate 961.0 times less return on investment than Catalyst Pharmaceuticals. But when comparing it to its historical volatility, GILEAD SCIENCES INC is 9.21 times less risky than Catalyst Pharmaceuticals. It trades about 0.0 of its potential returns per unit of risk. Catalyst Pharmaceuticals is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,974 in Catalyst Pharmaceuticals on September 3, 2024 and sell it today you would earn a total of 233.00 from holding Catalyst Pharmaceuticals or generate 11.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.31% |
| Values | Daily Returns |
GILEAD SCIENCES INC vs. Catalyst Pharmaceuticals
Performance |
| Timeline |
| GILEAD SCIENCES INC |
| Catalyst Pharmaceuticals |
GILEAD and Catalyst Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GILEAD and Catalyst Pharmaceuticals
The main advantage of trading using opposite GILEAD and Catalyst Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GILEAD 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.| GILEAD vs. Catalyst Pharmaceuticals | GILEAD vs. Acumen Pharmaceuticals | GILEAD vs. Iridium Communications | GILEAD vs. Pinterest |
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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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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