Correlation Between Catalent and Amphastar
Can any of the company-specific risk be diversified away by investing in both Catalent and Amphastar 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 Catalent and Amphastar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Catalent and Amphastar P, you can compare the effects of market volatilities on Catalent and Amphastar 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 Catalent with a short position of Amphastar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalent and Amphastar.
Diversification Opportunities for Catalent and Amphastar
Good diversification
The 3 months correlation between Catalent and Amphastar is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Catalent and Amphastar P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amphastar P and Catalent 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 Catalent are associated (or correlated) with Amphastar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amphastar P has no effect on the direction of Catalent i.e., Catalent and Amphastar go up and down completely randomly.
Pair Corralation between Catalent and Amphastar
Given the investment horizon of 90 days Catalent is expected to generate 0.23 times more return on investment than Amphastar. However, Catalent is 4.26 times less risky than Amphastar. It trades about 0.18 of its potential returns per unit of risk. Amphastar P is currently generating about -0.11 per unit of risk. If you would invest 5,909 in Catalent on August 26, 2024 and sell it today you would earn a total of 189.00 from holding Catalent or generate 3.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Catalent vs. Amphastar P
Performance |
| Timeline |
| Catalent |
| Amphastar P |
Catalent and Amphastar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catalent and Amphastar
The main advantage of trading using opposite Catalent and Amphastar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalent position performs unexpectedly, Amphastar 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 Amphastar will offset losses from the drop in Amphastar's long position.| Catalent vs. IQVIA Holdings | Catalent vs. West Pharmaceutical Services | Catalent vs. Charles River Laboratories | Catalent vs. Bio Rad Laboratories |
| Amphastar vs. Collegium Pharmaceutical | Amphastar vs. Alkermes Plc | Amphastar vs. Evolus Inc | Amphastar vs. Neurocrine Biosciences |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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