Correlation Between ECGI Holdings and Catalent
Can any of the company-specific risk be diversified away by investing in both ECGI Holdings 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 ECGI Holdings and Catalent into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ECGI Holdings and Catalent, you can compare the effects of market volatilities on ECGI Holdings 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 ECGI Holdings with a short position of Catalent. Check out your portfolio center. Please also check ongoing floating volatility patterns of ECGI Holdings and Catalent.
Diversification Opportunities for ECGI Holdings and Catalent
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ECGI and Catalent is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding ECGI Holdings and Catalent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalent and ECGI Holdings 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 ECGI Holdings 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 ECGI Holdings i.e., ECGI Holdings and Catalent go up and down completely randomly.
Pair Corralation between ECGI Holdings and Catalent
Given the investment horizon of 90 days ECGI Holdings is expected to generate 20.59 times more return on investment than Catalent. However, ECGI Holdings is 20.59 times more volatile than Catalent. It trades about 0.0 of its potential returns per unit of risk. Catalent is currently generating about 0.03 per unit of risk. If you would invest 0.18 in ECGI Holdings on September 3, 2024 and sell it today you would lose (0.07) from holding ECGI Holdings or give up 38.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ECGI Holdings vs. Catalent
Performance |
| Timeline |
| ECGI Holdings |
| Catalent |
ECGI Holdings and Catalent Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ECGI Holdings and Catalent
The main advantage of trading using opposite ECGI Holdings and Catalent positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ECGI Holdings 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.| ECGI Holdings vs. Senmiao Technology | ECGI Holdings vs. Reservoir Media | ECGI Holdings vs. Cedar Realty Trust | ECGI Holdings vs. PennantPark Floating Rate |
| Catalent vs. IQVIA Holdings | Catalent vs. West Pharmaceutical Services | Catalent vs. Charles River Laboratories | Catalent vs. Bio Rad Laboratories |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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