Correlation Between Catalent and Hypera SA

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

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

Diversification Opportunities for Catalent and Hypera SA

0.0

Correlation Coefficient

Catalent  Hypera SA

Pay attention - limited upside

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

Pair Corralation between Catalent and Hypera SA

If you would invest  290.00  in Hypera SA on December 29, 2024 and sell it today you would earn a total of  47.00  from holding Hypera SA or generate 16.21% return on investment over 90 days.

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

Catalent  vs.  Hypera SA

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.

Hypera SA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hypera SA are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile primary indicators, Hypera SA showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Catalent and Hypera SA

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

The idea behind Catalent and Hypera SA 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.