Correlation Between Pacira BioSciences, and Procaps Group

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

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

Diversification Opportunities for Pacira BioSciences, and Procaps Group

-0.5

Correlation Coefficient

Pacira BioSciences,  Procaps Group

Very good diversification

The 3 months correlation between Pacira and Procaps is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Pacira BioSciences, and Procaps Group SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Procaps Group SA and Pacira BioSciences, 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 Pacira BioSciences, are associated (or correlated) with Procaps Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Procaps Group SA has no effect on the direction of Pacira BioSciences, i.e., Pacira BioSciences, and Procaps Group go up and down completely randomly.

Pair Corralation between Pacira BioSciences, and Procaps Group

Given the investment horizon of 90 days Pacira BioSciences, is expected to under-perform the Procaps Group. But the stock apears to be less risky and, when comparing its historical volatility, Pacira BioSciences, is 4.09 times less risky than Procaps Group. The stock trades about -0.2 of its potential returns per unit of risk. The Procaps Group SA is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  101.00  in Procaps Group SA on December 3, 2024 and sell it today you would lose (11.00) from holding Procaps Group SA or give up 10.89% of portfolio value over 90 days.

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

Pacira BioSciences,  vs.  Procaps Group SA

Pacira BioSciences,

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Pacira BioSciences, are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Pacira BioSciences, showed solid returns over the last few months and may actually be approaching a breakup point.

Procaps Group SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Procaps Group SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Procaps Group is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Pacira BioSciences, and Procaps Group

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

The idea behind Pacira BioSciences, and Procaps Group 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.

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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.