Correlation Between Sunshine Biopharma and Catalent
Can any of the company-specific risk be diversified away by investing in both Sunshine Biopharma 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 Sunshine Biopharma and Catalent into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sunshine Biopharma and Catalent, you can compare the effects of market volatilities on Sunshine Biopharma 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 Sunshine Biopharma with a short position of Catalent. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunshine Biopharma and Catalent.
Diversification Opportunities for Sunshine Biopharma and Catalent
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sunshine and Catalent is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Sunshine Biopharma and Catalent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalent and Sunshine Biopharma 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 Sunshine Biopharma 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 Sunshine Biopharma i.e., Sunshine Biopharma and Catalent go up and down completely randomly.
Pair Corralation between Sunshine Biopharma and Catalent
Given the investment horizon of 90 days Sunshine Biopharma is expected to under-perform the Catalent. In addition to that, Sunshine Biopharma is 3.3 times more volatile than Catalent. It trades about -0.08 of its total potential returns per unit of risk. Catalent is currently generating about 0.03 per unit of volatility. If you would invest 5,077 in Catalent on August 24, 2024 and sell it today you would earn a total of 1,021 from holding Catalent or generate 20.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunshine Biopharma vs. Catalent
Performance |
| Timeline |
| Sunshine Biopharma |
| Catalent |
Sunshine Biopharma and Catalent Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunshine Biopharma and Catalent
The main advantage of trading using opposite Sunshine Biopharma and Catalent positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunshine Biopharma 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.| Sunshine Biopharma vs. Thayer Ventures Acquisition | Sunshine Biopharma vs. Biofrontera Warrants | Sunshine Biopharma vs. Neurosense Therapeutics |
| Catalent vs. Sunshine Biopharma | Catalent vs. Thayer Ventures Acquisition | Catalent vs. Biofrontera Warrants | Catalent vs. Neurosense Therapeutics |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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