Correlation Between ANI Pharmaceuticals and Catalent

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

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

Diversification Opportunities for ANI Pharmaceuticals and Catalent

0.0

Correlation Coefficient

ANI Pharmaceuticals  Catalent

Pay attention - limited upside

The 3 months correlation between ANI and Catalent is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ANI Pharmaceuticals and Catalent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalent and ANI 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 ANI Pharmaceuticals are associated (or correlated) with Catalent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalent has no effect on the direction of ANI Pharmaceuticals i.e., ANI Pharmaceuticals and Catalent go up and down completely randomly.

Pair Corralation between ANI Pharmaceuticals and Catalent

If you would invest  4,101  in ANI Pharmaceuticals on December 2, 2024 and sell it today you would earn a total of  2,088  from holding ANI Pharmaceuticals or generate 50.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

ANI Pharmaceuticals  vs.  Catalent

ANI Pharmaceuticals

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ANI Pharmaceuticals are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak forward indicators, ANI Pharmaceuticals may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Catalent

Risk-Adjusted Performance

Very Weak

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

Pair Trading with ANI Pharmaceuticals and Catalent

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

The idea behind ANI Pharmaceuticals and Catalent 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.

Check out your portfolio center.

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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.