Correlation Between Catalent and Athenex
Can any of the company-specific risk be diversified away by investing in both Catalent and Athenex 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 Athenex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Catalent and Athenex, you can compare the effects of market volatilities on Catalent and Athenex 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 Athenex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalent and Athenex.
Diversification Opportunities for Catalent and Athenex
Average diversification
The 3 months correlation between Catalent and Athenex is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Catalent and Athenex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Athenex 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 Athenex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Athenex has no effect on the direction of Catalent i.e., Catalent and Athenex go up and down completely randomly.
Pair Corralation between Catalent and Athenex
If you would invest 5,897 in Catalent on August 31, 2024 and sell it today you would earn a total of 203.00 from holding Catalent or generate 3.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Catalent vs. Athenex
Performance |
| Timeline |
| Catalent |
| Athenex |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Catalent and Athenex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catalent and Athenex
The main advantage of trading using opposite Catalent and Athenex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalent position performs unexpectedly, Athenex 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 Athenex will offset losses from the drop in Athenex's long position.The idea behind Catalent and Athenex pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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