Correlation Between RETAIL FOOD and Catalent
Can any of the company-specific risk be diversified away by investing in both RETAIL FOOD 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 RETAIL FOOD and Catalent into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RETAIL FOOD GROUP and Catalent, you can compare the effects of market volatilities on RETAIL FOOD 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 RETAIL FOOD with a short position of Catalent. Check out your portfolio center. Please also check ongoing floating volatility patterns of RETAIL FOOD and Catalent.
Diversification Opportunities for RETAIL FOOD and Catalent
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between RETAIL and Catalent is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding RETAIL FOOD GROUP and Catalent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalent and RETAIL FOOD 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 RETAIL FOOD GROUP 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 RETAIL FOOD i.e., RETAIL FOOD and Catalent go up and down completely randomly.
Pair Corralation between RETAIL FOOD and Catalent
Assuming the 90 days trading horizon RETAIL FOOD GROUP is expected to under-perform the Catalent. In addition to that, RETAIL FOOD is 15.12 times more volatile than Catalent. It trades about -0.32 of its total potential returns per unit of risk. Catalent is currently generating about -0.5 per unit of volatility. If you would invest 6,022 in Catalent on October 15, 2024 and sell it today you would lose (29.00) from holding Catalent or give up 0.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 25.0% |
| Values | Daily Returns |
RETAIL FOOD GROUP vs. Catalent
Performance |
| Timeline |
| RETAIL FOOD GROUP |
| Catalent |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
RETAIL FOOD and Catalent Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RETAIL FOOD and Catalent
The main advantage of trading using opposite RETAIL FOOD and Catalent positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RETAIL FOOD 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.| RETAIL FOOD vs. Silicon Motion Technology | RETAIL FOOD vs. Soken Chemical Engineering | RETAIL FOOD vs. Sekisui Chemical Co | RETAIL FOOD vs. Quaker Chemical |
| Catalent vs. BURLINGTON STORES | Catalent vs. Ebro Foods SA | Catalent vs. RETAIL FOOD GROUP | Catalent vs. BJs Wholesale Club |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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