Correlation Between Disney and Pasithea Therapeutics

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

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

Diversification Opportunities for Disney and Pasithea Therapeutics

-0.68

Correlation Coefficient

Disney  Pasithea Therapeutics

Excellent diversification

The 3 months correlation between Disney and Pasithea is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Walt Disney and Pasithea Therapeutics Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pasithea Therapeutics and Disney 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 Walt Disney are associated (or correlated) with Pasithea Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pasithea Therapeutics has no effect on the direction of Disney i.e., Disney and Pasithea Therapeutics go up and down completely randomly.

Pair Corralation between Disney and Pasithea Therapeutics

Considering the 90-day investment horizon Disney is expected to generate 5.65 times less return on investment than Pasithea Therapeutics. But when comparing it to its historical volatility, Walt Disney is 3.05 times less risky than Pasithea Therapeutics. It trades about 0.01 of its potential returns per unit of risk. Pasithea Therapeutics Corp is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  110.00  in Pasithea Therapeutics Corp on March 1, 2025 and sell it today you would lose (16.00) from holding Pasithea Therapeutics Corp or give up 14.55% of portfolio value over 90 days.

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

Walt Disney  vs.  Pasithea Therapeutics Corp

Walt Disney

Risk-Adjusted Performance

Very Weak

Over the last 90 days Walt Disney has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable forward indicators, Disney is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pasithea Therapeutics

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Pasithea Therapeutics Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat abnormal basic indicators, Pasithea Therapeutics may actually be approaching a critical reversion point that can send shares even higher in June 2025.

Pair Trading with Disney and Pasithea Therapeutics

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

The idea behind Walt Disney and Pasithea Therapeutics Corp 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.