Correlation Between Pasithea Therapeutics and Maris Tech

Can any of the company-specific risk be diversified away by investing in both Pasithea Therapeutics and Maris Tech 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 Pasithea Therapeutics and Maris Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Pasithea Therapeutics Corp and Maris Tech Ltd Warrants, you can compare the effects of market volatilities on Pasithea Therapeutics and Maris Tech 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 Pasithea Therapeutics with a short position of Maris Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pasithea Therapeutics and Maris Tech.

Diversification Opportunities for Pasithea Therapeutics and Maris Tech

-0.2

Correlation Coefficient

Pasithea Therapeutics  Maris Tech

Good diversification

The 3 months correlation between Pasithea and Maris is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Pasithea Therapeutics Corp and Maris Tech Ltd Warrants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maris Tech Warrants and Pasithea 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 Pasithea Therapeutics Corp are associated (or correlated) with Maris Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maris Tech Warrants has no effect on the direction of Pasithea Therapeutics i.e., Pasithea Therapeutics and Maris Tech go up and down completely randomly.

Pair Corralation between Pasithea Therapeutics and Maris Tech

Assuming the 90 days horizon Pasithea Therapeutics Corp is expected to generate 1.07 times more return on investment than Maris Tech. However, Pasithea Therapeutics is 1.07 times more volatile than Maris Tech Ltd Warrants. It trades about 0.07 of its potential returns per unit of risk. Maris Tech Ltd Warrants is currently generating about -0.01 per unit of risk. If you would invest  2.19  in Pasithea Therapeutics Corp on December 21, 2024 and sell it today you would lose (0.19) from holding Pasithea Therapeutics Corp or give up 8.68% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	57.69%
Values	Daily Returns

Pasithea Therapeutics Corp  vs.  Maris Tech Ltd Warrants

Pasithea Therapeutics

Risk-Adjusted Performance

Modest

Over the last 90 days Pasithea Therapeutics Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly weak basic indicators, Pasithea Therapeutics showed solid returns over the last few months and may actually be approaching a breakup point.

Maris Tech Warrants

Risk-Adjusted Performance

Very Weak

Over the last 90 days Maris Tech Ltd Warrants has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Stock's forward-looking signals remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Pasithea Therapeutics and Maris Tech

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

The idea behind Pasithea Therapeutics Corp and Maris Tech Ltd Warrants 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.