Correlation Between Catalyst Pharmaceuticals and Ivanhoe Electric

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

By analyzing existing cross correlation between Catalyst Pharmaceuticals and Ivanhoe Electric, you can compare the effects of market volatilities on Catalyst Pharmaceuticals and Ivanhoe Electric 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 Ivanhoe Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst Pharmaceuticals and Ivanhoe Electric.

Diversification Opportunities for Catalyst Pharmaceuticals and Ivanhoe Electric

-0.29

Correlation Coefficient

Catalyst Pharmaceuticals  Ivanhoe Electric

Very good diversification

The 3 months correlation between Catalyst and Ivanhoe is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Catalyst Pharmaceuticals and Ivanhoe Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ivanhoe Electric 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 Ivanhoe Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ivanhoe Electric has no effect on the direction of Catalyst Pharmaceuticals i.e., Catalyst Pharmaceuticals and Ivanhoe Electric go up and down completely randomly.

Pair Corralation between Catalyst Pharmaceuticals and Ivanhoe Electric

Given the investment horizon of 90 days Catalyst Pharmaceuticals is expected to generate 0.82 times more return on investment than Ivanhoe Electric. However, Catalyst Pharmaceuticals is 1.22 times less risky than Ivanhoe Electric. It trades about 0.05 of its potential returns per unit of risk. Ivanhoe Electric is currently generating about -0.04 per unit of risk. If you would invest  2,127  in Catalyst Pharmaceuticals on December 20, 2024 and sell it today you would earn a total of  133.00  from holding Catalyst Pharmaceuticals or generate 6.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Catalyst Pharmaceuticals  vs.  Ivanhoe Electric

Catalyst Pharmaceuticals

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Catalyst Pharmaceuticals are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Catalyst Pharmaceuticals may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Ivanhoe Electric

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ivanhoe Electric has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Catalyst Pharmaceuticals and Ivanhoe Electric

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

The idea behind Catalyst Pharmaceuticals and Ivanhoe Electric 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.