Correlation Between Pasithea Therapeutics and Inari Medical

Can any of the company-specific risk be diversified away by investing in both Pasithea Therapeutics and Inari Medical 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 Inari Medical 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 Inari Medical, you can compare the effects of market volatilities on Pasithea Therapeutics and Inari Medical 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 Inari Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pasithea Therapeutics and Inari Medical.

Diversification Opportunities for Pasithea Therapeutics and Inari Medical

0.41

Correlation Coefficient

Pasithea Therapeutics  Inari Medical

Very weak diversification

The 3 months correlation between Pasithea and Inari is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Pasithea Therapeutics Corp and Inari Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inari Medical 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 Inari Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inari Medical has no effect on the direction of Pasithea Therapeutics i.e., Pasithea Therapeutics and Inari Medical go up and down completely randomly.

Pair Corralation between Pasithea Therapeutics and Inari Medical

Assuming the 90 days horizon Pasithea Therapeutics Corp is expected to generate 11.65 times more return on investment than Inari Medical. However, Pasithea Therapeutics is 11.65 times more volatile than Inari Medical. It trades about 0.14 of its potential returns per unit of risk. Inari Medical is currently generating about -0.14 per unit of risk. If you would invest  2.30  in Pasithea Therapeutics Corp on October 8, 2024 and sell it today you would earn a total of  0.26  from holding Pasithea Therapeutics Corp or generate 11.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	42.11%
Values	Daily Returns

Pasithea Therapeutics Corp  vs.  Inari Medical

Pasithea Therapeutics

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Pasithea Therapeutics Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. 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.

Inari Medical

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Inari Medical are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly abnormal basic indicators, Inari Medical demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Pasithea Therapeutics and Inari Medical

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

The idea behind Pasithea Therapeutics Corp and Inari Medical 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.