Correlation Between Emergent Biosolutions and Catalent
Can any of the company-specific risk be diversified away by investing in both Emergent Biosolutions 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 Emergent Biosolutions and Catalent into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emergent Biosolutions and Catalent, you can compare the effects of market volatilities on Emergent Biosolutions 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 Emergent Biosolutions with a short position of Catalent. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emergent Biosolutions and Catalent.
Diversification Opportunities for Emergent Biosolutions and Catalent
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Emergent and Catalent is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Emergent Biosolutions and Catalent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalent and Emergent Biosolutions 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 Emergent Biosolutions 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 Emergent Biosolutions i.e., Emergent Biosolutions and Catalent go up and down completely randomly.
Pair Corralation between Emergent Biosolutions and Catalent
Considering the 90-day investment horizon Emergent Biosolutions is expected to generate 10.49 times more return on investment than Catalent. However, Emergent Biosolutions is 10.49 times more volatile than Catalent. It trades about 0.11 of its potential returns per unit of risk. Catalent is currently generating about 0.02 per unit of risk. If you would invest 739.00 in Emergent Biosolutions on August 31, 2024 and sell it today you would earn a total of 272.00 from holding Emergent Biosolutions or generate 36.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Emergent Biosolutions vs. Catalent
Performance |
| Timeline |
| Emergent Biosolutions |
| Catalent |
Emergent Biosolutions and Catalent Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emergent Biosolutions and Catalent
The main advantage of trading using opposite Emergent Biosolutions and Catalent positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emergent Biosolutions 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.| Emergent Biosolutions vs. Bausch Health Companies | Emergent Biosolutions vs. Neurocrine Biosciences | Emergent Biosolutions vs. Teva Pharma Industries | Emergent Biosolutions vs. Haleon plc |
| Catalent vs. Emergent Biosolutions | Catalent vs. Bausch Health Companies | Catalent vs. Neurocrine Biosciences | Catalent vs. Teva Pharma Industries |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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