Correlation Between Karyopharm Therapeutics and Catalyst Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Karyopharm Therapeutics and Catalyst Pharmaceuticals 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 Karyopharm Therapeutics and Catalyst Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Karyopharm Therapeutics and Catalyst Pharmaceuticals, you can compare the effects of market volatilities on Karyopharm Therapeutics 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 Karyopharm Therapeutics with a short position of Catalyst Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Karyopharm Therapeutics and Catalyst Pharmaceuticals.
Diversification Opportunities for Karyopharm Therapeutics and Catalyst Pharmaceuticals
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Karyopharm and Catalyst is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Karyopharm Therapeutics and Catalyst Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalyst Pharmaceuticals and Karyopharm Therapeutics 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 Karyopharm Therapeutics 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 Karyopharm Therapeutics i.e., Karyopharm Therapeutics and Catalyst Pharmaceuticals go up and down completely randomly.
Pair Corralation between Karyopharm Therapeutics and Catalyst Pharmaceuticals
Given the investment horizon of 90 days Karyopharm Therapeutics is expected to under-perform the Catalyst Pharmaceuticals. In addition to that, Karyopharm Therapeutics is 1.99 times more volatile than Catalyst Pharmaceuticals. It trades about -0.06 of its total potential returns per unit of risk. Catalyst Pharmaceuticals is currently generating about 0.14 per unit of volatility. If you would invest 1,504 in Catalyst Pharmaceuticals on September 25, 2024 and sell it today you would earn a total of 659.00 from holding Catalyst Pharmaceuticals or generate 43.82% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Karyopharm Therapeutics vs. Catalyst Pharmaceuticals
Performance |
Timeline |
Karyopharm Therapeutics |
Catalyst Pharmaceuticals |
Karyopharm Therapeutics and Catalyst Pharmaceuticals Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Karyopharm Therapeutics and Catalyst Pharmaceuticals
The main advantage of trading using opposite Karyopharm Therapeutics and Catalyst Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Karyopharm Therapeutics 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.Karyopharm Therapeutics vs. X4 Pharmaceuticals | Karyopharm Therapeutics vs. Hookipa Pharma | Karyopharm Therapeutics vs. Mereo BioPharma Group | Karyopharm Therapeutics vs. Acumen Pharmaceuticals |
Catalyst Pharmaceuticals vs. Fate Therapeutics | Catalyst Pharmaceuticals vs. Caribou Biosciences | Catalyst Pharmaceuticals vs. Karyopharm Therapeutics | Catalyst Pharmaceuticals vs. X4 Pharmaceuticals |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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