Correlation Between Pasithea Therapeutics and Yield10 Bioscience

Can any of the company-specific risk be diversified away by investing in both Pasithea Therapeutics and Yield10 Bioscience 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 Yield10 Bioscience 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 Yield10 Bioscience, you can compare the effects of market volatilities on Pasithea Therapeutics and Yield10 Bioscience 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 Yield10 Bioscience. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pasithea Therapeutics and Yield10 Bioscience.

Diversification Opportunities for Pasithea Therapeutics and Yield10 Bioscience

-0.21

Correlation Coefficient

Pasithea Therapeutics  Yield10 Bioscience

Very good diversification

The 3 months correlation between Pasithea and Yield10 is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Pasithea Therapeutics Corp and Yield10 Bioscience in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yield10 Bioscience 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 Yield10 Bioscience. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yield10 Bioscience has no effect on the direction of Pasithea Therapeutics i.e., Pasithea Therapeutics and Yield10 Bioscience go up and down completely randomly.

Pair Corralation between Pasithea Therapeutics and Yield10 Bioscience

Assuming the 90 days horizon Pasithea Therapeutics Corp is expected to generate 0.97 times more return on investment than Yield10 Bioscience. However, Pasithea Therapeutics Corp is 1.03 times less risky than Yield10 Bioscience. It trades about 0.08 of its potential returns per unit of risk. Yield10 Bioscience is currently generating about -0.11 per unit of risk. If you would invest  2.80  in Pasithea Therapeutics Corp on October 25, 2024 and sell it today you would lose (0.29) from holding Pasithea Therapeutics Corp or give up 10.36% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	45.76%
Values	Daily Returns

Pasithea Therapeutics Corp  vs.  Yield10 Bioscience

Pasithea Therapeutics

Risk-Adjusted Performance

0 of 100

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.

Yield10 Bioscience

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Yield10 Bioscience has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Pasithea Therapeutics and Yield10 Bioscience

The main advantage of trading using opposite Pasithea Therapeutics and Yield10 Bioscience positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pasithea Therapeutics position performs unexpectedly, Yield10 Bioscience 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 Yield10 Bioscience will offset losses from the drop in Yield10 Bioscience's long position.

The idea behind Pasithea Therapeutics Corp and Yield10 Bioscience 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 Transaction History module to view history of all your transactions and understand their impact on performance.