Correlation Between Phibro Animal and Catalent
Can any of the company-specific risk be diversified away by investing in both Phibro Animal 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 Phibro Animal and Catalent into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Phibro Animal Health and Catalent, you can compare the effects of market volatilities on Phibro Animal 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 Phibro Animal with a short position of Catalent. Check out your portfolio center. Please also check ongoing floating volatility patterns of Phibro Animal and Catalent.
Diversification Opportunities for Phibro Animal and Catalent
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Phibro and Catalent is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Phibro Animal Health and Catalent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalent and Phibro Animal 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 Phibro Animal Health 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 Phibro Animal i.e., Phibro Animal and Catalent go up and down completely randomly.
Pair Corralation between Phibro Animal and Catalent
Given the investment horizon of 90 days Phibro Animal is expected to generate 3.42 times less return on investment than Catalent. In addition to that, Phibro Animal is 2.65 times more volatile than Catalent. It trades about 0.02 of its total potential returns per unit of risk. Catalent is currently generating about 0.21 per unit of volatility. If you would invest 5,881 in Catalent on August 27, 2024 and sell it today you would earn a total of 217.00 from holding Catalent or generate 3.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Phibro Animal Health vs. Catalent
Performance |
| Timeline |
| Phibro Animal Health |
| Catalent |
Phibro Animal and Catalent Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Phibro Animal and Catalent
The main advantage of trading using opposite Phibro Animal and Catalent positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Phibro Animal 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.| Phibro Animal vs. Pacira BioSciences, | Phibro Animal vs. Dr Reddys Laboratories | Phibro Animal vs. Collegium Pharmaceutical | Phibro Animal vs. ANI Pharmaceuticals |
| 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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