Correlation Between Catalyst Biosciences and Jaguar Animal

Can any of the company-specific risk be diversified away by investing in both Catalyst Biosciences and Jaguar Animal 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 Catalyst Biosciences and Jaguar Animal into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Catalyst Biosciences and Jaguar Animal Health, you can compare the effects of market volatilities on Catalyst Biosciences and Jaguar Animal 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 Catalyst Biosciences with a short position of Jaguar Animal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst Biosciences and Jaguar Animal.

Diversification Opportunities for Catalyst Biosciences and Jaguar Animal

-0.59

Correlation Coefficient

Catalyst Biosciences  Jaguar Animal

Excellent diversification

The 3 months correlation between Catalyst and Jaguar is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Catalyst Biosciences and Jaguar Animal Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jaguar Animal Health and Catalyst 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 Catalyst Biosciences are associated (or correlated) with Jaguar Animal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jaguar Animal Health has no effect on the direction of Catalyst Biosciences i.e., Catalyst Biosciences and Jaguar Animal go up and down completely randomly.

Pair Corralation between Catalyst Biosciences and Jaguar Animal

If you would invest  41.00  in Catalyst Biosciences on September 17, 2024 and sell it today you would earn a total of  0.00  from holding Catalyst Biosciences or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.54%
Values	Daily Returns

Catalyst Biosciences  vs.  Jaguar Animal Health

Catalyst Biosciences

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Catalyst Biosciences has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward indicators, Catalyst Biosciences is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Jaguar Animal Health

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jaguar Animal Health has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Catalyst Biosciences and Jaguar Animal

The main advantage of trading using opposite Catalyst Biosciences and Jaguar Animal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalyst Biosciences position performs unexpectedly, Jaguar Animal 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 Jaguar Animal will offset losses from the drop in Jaguar Animal's long position.

The idea behind Catalyst Biosciences and Jaguar Animal Health 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.