Correlation Between Catalent and Lipocine
Can any of the company-specific risk be diversified away by investing in both Catalent and Lipocine 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 Lipocine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Catalent and Lipocine, you can compare the effects of market volatilities on Catalent and Lipocine 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 Lipocine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalent and Lipocine.
Diversification Opportunities for Catalent and Lipocine
Very good diversification
The 3 months correlation between Catalent and Lipocine is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Catalent and Lipocine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lipocine 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 Lipocine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lipocine has no effect on the direction of Catalent i.e., Catalent and Lipocine go up and down completely randomly.
Pair Corralation between Catalent and Lipocine
Given the investment horizon of 90 days Catalent is expected to generate 0.16 times more return on investment than Lipocine. However, Catalent is 6.27 times less risky than Lipocine. It trades about 0.4 of its potential returns per unit of risk. Lipocine is currently generating about 0.0 per unit of risk. If you would invest 5,946 in Catalent on September 12, 2024 and sell it today you would earn a total of 378.00 from holding Catalent or generate 6.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Catalent vs. Lipocine
Performance |
| Timeline |
| Catalent |
| Lipocine |
Catalent and Lipocine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catalent and Lipocine
The main advantage of trading using opposite Catalent and Lipocine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalent position performs unexpectedly, Lipocine 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 Lipocine will offset losses from the drop in Lipocine's long position.| Catalent vs. Evoke Pharma | Catalent vs. Lantheus Holdings | Catalent vs. ANI Pharmaceuticals | Catalent vs. Ironwood Pharmaceuticals |
| Lipocine vs. Reviva Pharmaceuticals Holdings | Lipocine vs. ZyVersa Therapeutics | Lipocine vs. Unicycive Therapeutics | Lipocine vs. Checkpoint 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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