Correlation Between Catalent and Genomma Lab

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

By analyzing existing cross correlation between Catalent and Genomma Lab Internacional, you can compare the effects of market volatilities on Catalent and Genomma Lab 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 Genomma Lab. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalent and Genomma Lab.

Diversification Opportunities for Catalent and Genomma Lab

0.0

Correlation Coefficient

Catalent  Genomma Lab

Pay attention - limited upside

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

Pair Corralation between Catalent and Genomma Lab

If you would invest (100.00) in Genomma Lab Internacional on December 1, 2024 and sell it today you would earn a total of  100.00  from holding Genomma Lab Internacional or generate -100.0% return on investment over 90 days.

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

Catalent  vs.  Genomma Lab Internacional

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.

Genomma Lab Internacional

Risk-Adjusted Performance

Very Weak

Over the last 90 days Genomma Lab Internacional has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable essential indicators, Genomma Lab is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Catalent and Genomma Lab

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

The idea behind Catalent and Genomma Lab Internacional 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.