Correlation Between ANI Pharmaceuticals and Procaps Group
Can any of the company-specific risk be diversified away by investing in both ANI Pharmaceuticals 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 ANI Pharmaceuticals and Procaps Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ANI Pharmaceuticals and Procaps Group SA, you can compare the effects of market volatilities on ANI Pharmaceuticals 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 ANI Pharmaceuticals with a short position of Procaps Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANI Pharmaceuticals and Procaps Group.
Diversification Opportunities for ANI Pharmaceuticals and Procaps Group
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ANI and Procaps is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding ANI Pharmaceuticals 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 ANI Pharmaceuticals 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 ANI Pharmaceuticals 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 ANI Pharmaceuticals i.e., ANI Pharmaceuticals and Procaps Group go up and down completely randomly.
Pair Corralation between ANI Pharmaceuticals and Procaps Group
Given the investment horizon of 90 days ANI Pharmaceuticals is expected to generate 85.96 times less return on investment than Procaps Group. But when comparing it to its historical volatility, ANI Pharmaceuticals is 44.89 times less risky than Procaps Group. It trades about 0.05 of its potential returns per unit of risk. Procaps Group SA is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 62.00 in Procaps Group SA on August 24, 2024 and sell it today you would lose (60.90) from holding Procaps Group SA or give up 98.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 75.6% |
| Values | Daily Returns |
ANI Pharmaceuticals vs. Procaps Group SA
Performance |
| Timeline |
| ANI Pharmaceuticals |
| Procaps Group SA |
ANI Pharmaceuticals and Procaps Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ANI Pharmaceuticals and Procaps Group
The main advantage of trading using opposite ANI Pharmaceuticals and Procaps Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANI Pharmaceuticals 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.| ANI Pharmaceuticals vs. Phibro Animal Health | ANI Pharmaceuticals vs. Prestige Brand Holdings | ANI Pharmaceuticals vs. Alkermes Plc | ANI Pharmaceuticals vs. Dr Reddys Laboratories |
| Procaps Group vs. Procaps Group SA | Procaps Group vs. Quantum Si incorporated | Procaps Group vs. Jasper Therapeutics |
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 Stocks Directory module to find actively traded stocks across global markets.
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