Correlation Between Assertio Therapeutics and Catalent
Can any of the company-specific risk be diversified away by investing in both Assertio Therapeutics 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 Assertio Therapeutics and Catalent into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Assertio Therapeutics and Catalent, you can compare the effects of market volatilities on Assertio Therapeutics 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 Assertio Therapeutics with a short position of Catalent. Check out your portfolio center. Please also check ongoing floating volatility patterns of Assertio Therapeutics and Catalent.
Diversification Opportunities for Assertio Therapeutics and Catalent
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Assertio and Catalent is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Assertio Therapeutics and Catalent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalent and Assertio Therapeutics 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 Assertio Therapeutics 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 Assertio Therapeutics i.e., Assertio Therapeutics and Catalent go up and down completely randomly.
Pair Corralation between Assertio Therapeutics and Catalent
Given the investment horizon of 90 days Assertio Therapeutics is expected to under-perform the Catalent. In addition to that, Assertio Therapeutics is 8.9 times more volatile than Catalent. It trades about -0.03 of its total potential returns per unit of risk. Catalent is currently generating about 0.03 per unit of volatility. If you would invest 5,940 in Catalent on August 24, 2024 and sell it today you would earn a total of 26.00 from holding Catalent or generate 0.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Assertio Therapeutics vs. Catalent
Performance |
| Timeline |
| Assertio Therapeutics |
| Catalent |
Assertio Therapeutics and Catalent Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Assertio Therapeutics and Catalent
The main advantage of trading using opposite Assertio Therapeutics and Catalent positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Assertio Therapeutics 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.| Assertio Therapeutics vs. Amneal Pharmaceuticals, Class | Assertio Therapeutics vs. Lifecore Biomedical | Assertio Therapeutics vs. Ironwood Pharmaceuticals | Assertio Therapeutics vs. Neurocrine Biosciences |
| Catalent vs. Sunshine Biopharma | Catalent vs. Thayer Ventures Acquisition | Catalent vs. Biofrontera Warrants | Catalent vs. Neurosense 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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