Correlation Between Procaps Group and Prestige Brand
Can any of the company-specific risk be diversified away by investing in both Procaps Group and Prestige Brand 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 Procaps Group and Prestige Brand into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Procaps Group SA and Prestige Brand Holdings, you can compare the effects of market volatilities on Procaps Group and Prestige Brand 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 Procaps Group with a short position of Prestige Brand. Check out your portfolio center. Please also check ongoing floating volatility patterns of Procaps Group and Prestige Brand.
Diversification Opportunities for Procaps Group and Prestige Brand
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Procaps and Prestige is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Procaps Group SA and Prestige Brand Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prestige Brand Holdings and Procaps Group 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 Procaps Group SA are associated (or correlated) with Prestige Brand. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prestige Brand Holdings has no effect on the direction of Procaps Group i.e., Procaps Group and Prestige Brand go up and down completely randomly.
Pair Corralation between Procaps Group and Prestige Brand
Given the investment horizon of 90 days Procaps Group SA is expected to under-perform the Prestige Brand. In addition to that, Procaps Group is 20.47 times more volatile than Prestige Brand Holdings. It trades about -0.05 of its total potential returns per unit of risk. Prestige Brand Holdings is currently generating about 0.58 per unit of volatility. If you would invest 7,363 in Prestige Brand Holdings on August 27, 2024 and sell it today you would earn a total of 1,122 from holding Prestige Brand Holdings or generate 15.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Procaps Group SA vs. Prestige Brand Holdings
Performance |
| Timeline |
| Procaps Group SA |
| Prestige Brand Holdings |
Procaps Group and Prestige Brand Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Procaps Group and Prestige Brand
The main advantage of trading using opposite Procaps Group and Prestige Brand positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Procaps Group position performs unexpectedly, Prestige Brand 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 Prestige Brand will offset losses from the drop in Prestige Brand's long position.| Procaps Group vs. Phibro Animal Health | Procaps Group vs. Delta 9 Cannabis | Procaps Group vs. City View Green | Procaps Group vs. Benchmark Botanics |
| Prestige Brand vs. Evotec SE ADR | Prestige Brand vs. Supernus Pharmaceuticals | Prestige Brand vs. Collegium Pharmaceutical | Prestige Brand vs. Regencell Bioscience Holdings |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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