Correlation Between Catalent and Journey Medical
Can any of the company-specific risk be diversified away by investing in both Catalent and Journey Medical 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 Journey Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Catalent and Journey Medical Corp, you can compare the effects of market volatilities on Catalent and Journey Medical 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 Journey Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalent and Journey Medical.
Diversification Opportunities for Catalent and Journey Medical
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Catalent and Journey is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Catalent and Journey Medical Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Journey Medical Corp 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 Journey Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Journey Medical Corp has no effect on the direction of Catalent i.e., Catalent and Journey Medical go up and down completely randomly.
Pair Corralation between Catalent and Journey Medical
Given the investment horizon of 90 days Catalent is expected to generate 15.7 times less return on investment than Journey Medical. But when comparing it to its historical volatility, Catalent is 2.19 times less risky than Journey Medical. It trades about 0.01 of its potential returns per unit of risk. Journey Medical Corp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 203.00 in Journey Medical Corp on November 5, 2024 and sell it today you would earn a total of 252.00 from holding Journey Medical Corp or generate 124.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.13% |
| Values | Daily Returns |
Catalent vs. Journey Medical Corp
Performance |
| Timeline |
| Catalent |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Strong
| Journey Medical Corp |
Catalent and Journey Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catalent and Journey Medical
The main advantage of trading using opposite Catalent and Journey Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalent position performs unexpectedly, Journey Medical 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 Journey Medical will offset losses from the drop in Journey Medical's long position.| Catalent vs. IQVIA Holdings | Catalent vs. West Pharmaceutical Services | Catalent vs. Charles River Laboratories | Catalent vs. Bio Rad Laboratories |
| Journey Medical vs. Evoke Pharma | Journey Medical vs. Avadel Pharmaceuticals PLC | Journey Medical vs. Aquestive Therapeutics | Journey Medical vs. Cresco Labs |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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