Correlation Between FREEPORT and Catalent

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

By analyzing existing cross correlation between FREEPORT MCMORAN INC 4375 and Catalent, you can compare the effects of market volatilities on FREEPORT 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 FREEPORT with a short position of Catalent. Check out your portfolio center. Please also check ongoing floating volatility patterns of FREEPORT and Catalent.

Diversification Opportunities for FREEPORT and Catalent

-0.54

Correlation Coefficient

FREEPORT  Catalent

Excellent diversification

The 3 months correlation between FREEPORT and Catalent is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding FREEPORT MCMORAN INC 4375 and Catalent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalent and FREEPORT 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 FREEPORT MCMORAN INC 4375 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 FREEPORT i.e., FREEPORT and Catalent go up and down completely randomly.

Pair Corralation between FREEPORT and Catalent

Assuming the 90 days trading horizon FREEPORT MCMORAN INC 4375 is expected to under-perform the Catalent. In addition to that, FREEPORT is 1.05 times more volatile than Catalent. It trades about -0.16 of its total potential returns per unit of risk. Catalent is currently generating about 0.14 per unit of volatility. If you would invest  6,014  in Catalent on September 24, 2024 and sell it today you would earn a total of  334.00  from holding Catalent or generate 5.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

FREEPORT MCMORAN INC 4375  vs.  Catalent

FREEPORT MCMORAN INC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FREEPORT MCMORAN INC 4375 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for FREEPORT MCMORAN INC 4375 investors.

Catalent

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Catalent are ranked lower than 10 (%) 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 FREEPORT and Catalent

The main advantage of trading using opposite FREEPORT and Catalent positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FREEPORT 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 FREEPORT MCMORAN INC 4375 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.