Correlation Between Catalyst Biosciences and Apexigen

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

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

Diversification Opportunities for Catalyst Biosciences and Apexigen

-0.12

Correlation Coefficient

Catalyst Biosciences  Apexigen

Good diversification

The 3 months correlation between Catalyst and Apexigen is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Catalyst Biosciences and Apexigen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apexigen and Catalyst Biosciences 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 Biosciences are associated (or correlated) with Apexigen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apexigen has no effect on the direction of Catalyst Biosciences i.e., Catalyst Biosciences and Apexigen go up and down completely randomly.

Pair Corralation between Catalyst Biosciences and Apexigen

Given the investment horizon of 90 days Catalyst Biosciences is expected to generate 2.04 times more return on investment than Apexigen. However, Catalyst Biosciences is 2.04 times more volatile than Apexigen. It trades about 0.32 of its potential returns per unit of risk. Apexigen is currently generating about -0.1 per unit of risk. If you would invest  22.00  in Catalyst Biosciences on August 31, 2024 and sell it today you would earn a total of  19.00  from holding Catalyst Biosciences or generate 86.36% return on investment over 90 days.

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

Catalyst Biosciences  vs.  Apexigen

Catalyst Biosciences

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Catalyst Biosciences has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward indicators, Catalyst Biosciences is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Apexigen

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Apexigen has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Apexigen is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Catalyst Biosciences and Apexigen

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

The idea behind Catalyst Biosciences and Apexigen 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.