Correlation Between Catalent and Intracellular

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

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

Diversification Opportunities for Catalent and Intracellular

-0.1

Correlation Coefficient

Catalent  Intracellular

Good diversification

The 3 months correlation between Catalent and Intracellular is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Catalent and Intracellular Th in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intracellular Th 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 Intracellular. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intracellular Th has no effect on the direction of Catalent i.e., Catalent and Intracellular go up and down completely randomly.

Pair Corralation between Catalent and Intracellular

Given the investment horizon of 90 days Catalent is expected to generate 2.64 times less return on investment than Intracellular. But when comparing it to its historical volatility, Catalent is 3.46 times less risky than Intracellular. It trades about 0.11 of its potential returns per unit of risk. Intracellular Th is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  7,522  in Intracellular Th on September 12, 2024 and sell it today you would earn a total of  789.00  from holding Intracellular Th or generate 10.49% return on investment over 90 days.

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

Catalent  vs.  Intracellular Th

Catalent

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Catalent are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. 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.

Intracellular Th

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Intracellular Th are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain fundamental indicators, Intracellular may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Catalent and Intracellular

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

The idea behind Catalent and Intracellular Th 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.