Correlation Between Alimera Sciences and Catalent
Can any of the company-specific risk be diversified away by investing in both Alimera Sciences 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 Alimera Sciences and Catalent into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alimera Sciences and Catalent, you can compare the effects of market volatilities on Alimera Sciences 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 Alimera Sciences with a short position of Catalent. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alimera Sciences and Catalent.
Diversification Opportunities for Alimera Sciences and Catalent
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Alimera and Catalent is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Alimera Sciences and Catalent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalent and Alimera Sciences 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 Alimera Sciences 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 Alimera Sciences i.e., Alimera Sciences and Catalent go up and down completely randomly.
Pair Corralation between Alimera Sciences and Catalent
If you would invest 6,348 in Catalent on October 26, 2024 and sell it today you would earn a total of 0.00 from holding Catalent or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alimera Sciences vs. Catalent
Performance |
| Timeline |
| Alimera Sciences |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Catalent |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
Alimera Sciences and Catalent Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alimera Sciences and Catalent
The main advantage of trading using opposite Alimera Sciences and Catalent positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alimera Sciences 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.| Alimera Sciences vs. Shuttle Pharmaceuticals | Alimera Sciences vs. Lifecore Biomedical | Alimera Sciences vs. Journey Medical Corp | Alimera Sciences vs. Organogenesis Holdings |
| Catalent vs. IQVIA Holdings | Catalent vs. West Pharmaceutical Services | Catalent vs. Charles River Laboratories | Catalent vs. Bio Rad Laboratories |
Check out your portfolio center.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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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