Correlation Between Connect Biopharma and Catalent
Can any of the company-specific risk be diversified away by investing in both Connect Biopharma 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 Connect Biopharma and Catalent into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Connect Biopharma Holdings and Catalent, you can compare the effects of market volatilities on Connect Biopharma 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 Connect Biopharma with a short position of Catalent. Check out your portfolio center. Please also check ongoing floating volatility patterns of Connect Biopharma and Catalent.
Diversification Opportunities for Connect Biopharma and Catalent
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Connect and Catalent is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Connect Biopharma Holdings and Catalent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalent and Connect Biopharma 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 Connect Biopharma Holdings 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 Connect Biopharma i.e., Connect Biopharma and Catalent go up and down completely randomly.
Pair Corralation between Connect Biopharma and Catalent
Given the investment horizon of 90 days Connect Biopharma Holdings is expected to under-perform the Catalent. In addition to that, Connect Biopharma is 10.78 times more volatile than Catalent. It trades about -0.02 of its total potential returns per unit of risk. Catalent is currently generating about 0.08 per unit of volatility. If you would invest 5,669 in Catalent on September 3, 2024 and sell it today you would earn a total of 442.00 from holding Catalent or generate 7.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Connect Biopharma Holdings vs. Catalent
Performance |
| Timeline |
| Connect Biopharma |
| Catalent |
Connect Biopharma and Catalent Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Connect Biopharma and Catalent
The main advantage of trading using opposite Connect Biopharma and Catalent positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Connect Biopharma 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.| Connect Biopharma vs. DiaMedica Therapeutics | Connect Biopharma vs. Lyra Therapeutics | Connect Biopharma vs. Centessa Pharmaceuticals PLC |
| 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |