Correlation Between IQVIA Holdings and Catalent

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

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

Diversification Opportunities for IQVIA Holdings and Catalent

0.44

Correlation Coefficient

IQVIA Holdings  Catalent

Very weak diversification

The 3 months correlation between IQVIA and Catalent is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding IQVIA Holdings and Catalent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalent and IQVIA Holdings 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 IQVIA Holdings 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 IQVIA Holdings i.e., IQVIA Holdings and Catalent go up and down completely randomly.

Pair Corralation between IQVIA Holdings and Catalent

Considering the 90-day investment horizon IQVIA Holdings is expected to under-perform the Catalent. In addition to that, IQVIA Holdings is 3.04 times more volatile than Catalent. It trades about -0.17 of its total potential returns per unit of risk. Catalent is currently generating about 0.02 per unit of volatility. If you would invest  6,070  in Catalent on September 3, 2024 and sell it today you would earn a total of  41.00  from holding Catalent or generate 0.68% return on investment over 90 days.

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

IQVIA Holdings  vs.  Catalent

IQVIA Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days IQVIA Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Catalent

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Catalent are ranked lower than 1 (%) 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.

Pair Trading with IQVIA Holdings and Catalent

The main advantage of trading using opposite IQVIA Holdings and Catalent positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IQVIA Holdings 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 IQVIA Holdings 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.

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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.