Correlation Between Pasithea Therapeutics and Cingulate

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

Diversification Opportunities for Pasithea Therapeutics and Cingulate

0.86

Correlation Coefficient

Pasithea Therapeutics  Cingulate

Very poor diversification

The 3 months correlation between Pasithea and Cingulate is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Pasithea Therapeutics Corp and Cingulate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cingulate 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 Cingulate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cingulate has no effect on the direction of Pasithea Therapeutics i.e., Pasithea Therapeutics and Cingulate go up and down completely randomly.

Pair Corralation between Pasithea Therapeutics and Cingulate

Given the investment horizon of 90 days Pasithea Therapeutics Corp is expected to under-perform the Cingulate. In addition to that, Pasithea Therapeutics is 3.0 times more volatile than Cingulate. It trades about -0.05 of its total potential returns per unit of risk. Cingulate is currently generating about -0.05 per unit of volatility. If you would invest  482.00  in Cingulate on January 18, 2025 and sell it today you would lose (58.00) from holding Cingulate or give up 12.03% of portfolio value over 90 days.

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

Pasithea Therapeutics Corp  vs.  Cingulate

Pasithea Therapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pasithea Therapeutics Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite abnormal performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in May 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Cingulate

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cingulate has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Pasithea Therapeutics and Cingulate

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

The idea behind Pasithea Therapeutics Corp and Cingulate 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.