Correlation Between Catalent and Alkermes Plc

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

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

Diversification Opportunities for Catalent and Alkermes Plc

0.0

Correlation Coefficient

Catalent  Alkermes Plc

Pay attention - limited upside

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

Pair Corralation between Catalent and Alkermes Plc

If you would invest  2,878  in Alkermes Plc on December 30, 2024 and sell it today you would earn a total of  443.00  from holding Alkermes Plc or generate 15.39% return on investment over 90 days.

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

Catalent  vs.  Alkermes Plc

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.

Alkermes Plc

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Alkermes Plc are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent forward-looking signals, Alkermes Plc unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Catalent and Alkermes Plc

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

The idea behind Catalent and Alkermes Plc 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.