Correlation Between Catalyst Pharmaceuticals and Hafnia

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

Diversification Opportunities for Catalyst Pharmaceuticals and Hafnia

0.13
  Correlation Coefficient

Average diversification

The 3 months correlation between Catalyst and Hafnia is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Catalyst Pharmaceuticals and Hafnia Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hafnia Limited and Catalyst Pharmaceuticals 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 Pharmaceuticals are associated (or correlated) with Hafnia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hafnia Limited has no effect on the direction of Catalyst Pharmaceuticals i.e., Catalyst Pharmaceuticals and Hafnia go up and down completely randomly.

Pair Corralation between Catalyst Pharmaceuticals and Hafnia

If you would invest  2,211  in Catalyst Pharmaceuticals on October 11, 2024 and sell it today you would earn a total of  69.00  from holding Catalyst Pharmaceuticals or generate 3.12% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy4.76%
ValuesDaily Returns

Catalyst Pharmaceuticals  vs.  Hafnia Limited

 Performance 
       Timeline  
Catalyst Pharmaceuticals 

Risk-Adjusted Performance

6 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Catalyst Pharmaceuticals are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Catalyst Pharmaceuticals showed solid returns over the last few months and may actually be approaching a breakup point.
Hafnia Limited 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Hafnia Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Hafnia is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Catalyst Pharmaceuticals and Hafnia Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Catalyst Pharmaceuticals and Hafnia

The main advantage of trading using opposite Catalyst Pharmaceuticals and Hafnia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalyst Pharmaceuticals position performs unexpectedly, Hafnia 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 Hafnia will offset losses from the drop in Hafnia's long position.
The idea behind Catalyst Pharmaceuticals and Hafnia Limited 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.
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.

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