Correlation Between Catalyst Pharmaceuticals and Seer

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

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

Diversification Opportunities for Catalyst Pharmaceuticals and Seer

-0.4

Correlation Coefficient

Catalyst Pharmaceuticals  Seer

Very good diversification

The 3 months correlation between Catalyst and Seer is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Catalyst Pharmaceuticals and Seer Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seer Inc 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 Seer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seer Inc has no effect on the direction of Catalyst Pharmaceuticals i.e., Catalyst Pharmaceuticals and Seer go up and down completely randomly.

Pair Corralation between Catalyst Pharmaceuticals and Seer

Given the investment horizon of 90 days Catalyst Pharmaceuticals is expected to generate 0.66 times more return on investment than Seer. However, Catalyst Pharmaceuticals is 1.53 times less risky than Seer. It trades about 0.19 of its potential returns per unit of risk. Seer Inc is currently generating about 0.08 per unit of risk. If you would invest  2,219  in Catalyst Pharmaceuticals on February 15, 2025 and sell it today you would earn a total of  200.00  from holding Catalyst Pharmaceuticals or generate 9.01% return on investment over 90 days.

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

Catalyst Pharmaceuticals  vs.  Seer Inc

Catalyst Pharmaceuticals

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Catalyst Pharmaceuticals are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Catalyst Pharmaceuticals is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Seer Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Seer Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable technical and fundamental indicators, Seer is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Catalyst Pharmaceuticals and Seer

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

The idea behind Catalyst Pharmaceuticals and Seer Inc 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.