Correlation Between Procaps Group and Intracellular

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

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

Diversification Opportunities for Procaps Group and Intracellular

-0.65

Correlation Coefficient

Procaps Group  Intracellular

Excellent diversification

The 3 months correlation between Procaps and Intracellular is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Procaps Group SA and Intracellular Th in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intracellular Th and Procaps Group 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 Procaps Group SA 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 Procaps Group i.e., Procaps Group and Intracellular go up and down completely randomly.

Pair Corralation between Procaps Group and Intracellular

Given the investment horizon of 90 days Procaps Group SA is expected to generate 8.03 times more return on investment than Intracellular. However, Procaps Group is 8.03 times more volatile than Intracellular Th. It trades about 0.05 of its potential returns per unit of risk. Intracellular Th is currently generating about 0.13 per unit of risk. If you would invest  190.00  in Procaps Group SA on August 31, 2024 and sell it today you would lose (39.00) from holding Procaps Group SA or give up 20.53% of portfolio value over 90 days.

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

Procaps Group SA  vs.  Intracellular Th

Procaps Group SA

Risk-Adjusted Performance

3 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Procaps Group SA are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, Procaps Group exhibited solid returns over the last few months and may actually be approaching a breakup point.

Intracellular Th

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Intracellular Th are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain fundamental indicators, Intracellular demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Procaps Group and Intracellular

The main advantage of trading using opposite Procaps Group and Intracellular positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Procaps Group 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 Procaps Group SA 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.