Correlation Between Orexo AB and Catalent
Can any of the company-specific risk be diversified away by investing in both Orexo AB 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 Orexo AB and Catalent into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Orexo AB and Catalent, you can compare the effects of market volatilities on Orexo AB 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 Orexo AB with a short position of Catalent. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orexo AB and Catalent.
Diversification Opportunities for Orexo AB and Catalent
Very weak diversification
The 3 months correlation between Orexo and Catalent is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Orexo AB and Catalent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalent and Orexo AB 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 Orexo AB 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 Orexo AB i.e., Orexo AB and Catalent go up and down completely randomly.
Pair Corralation between Orexo AB and Catalent
Assuming the 90 days horizon Orexo AB is expected to under-perform the Catalent. In addition to that, Orexo AB is 3.95 times more volatile than Catalent. It trades about -0.09 of its total potential returns per unit of risk. Catalent is currently generating about 0.15 per unit of volatility. If you would invest 5,428 in Catalent on August 31, 2024 and sell it today you would earn a total of 683.00 from holding Catalent or generate 12.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Orexo AB vs. Catalent
Performance |
| Timeline |
| Orexo AB |
| Catalent |
Orexo AB and Catalent Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orexo AB and Catalent
The main advantage of trading using opposite Orexo AB and Catalent positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orexo AB 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.| Orexo AB vs. Genomma Lab Internacional | Orexo AB vs. Hypera SA | Orexo AB vs. Elanco Animal Health | Orexo AB vs. SIGA Technologies |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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