Correlation Between Shuttle Pharmaceuticals and Procaps Group

Can any of the company-specific risk be diversified away by investing in both Shuttle Pharmaceuticals and Procaps Group 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 Shuttle Pharmaceuticals and Procaps Group into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Shuttle Pharmaceuticals and Procaps Group SA, you can compare the effects of market volatilities on Shuttle Pharmaceuticals and Procaps Group 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 Shuttle Pharmaceuticals with a short position of Procaps Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shuttle Pharmaceuticals and Procaps Group.

Diversification Opportunities for Shuttle Pharmaceuticals and Procaps Group

0.39

Correlation Coefficient

Shuttle Pharmaceuticals  Procaps Group

Weak diversification

The 3 months correlation between Shuttle and Procaps is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Shuttle Pharmaceuticals and Procaps Group SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Procaps Group SA and Shuttle Pharmaceuticals 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 Shuttle Pharmaceuticals are associated (or correlated) with Procaps Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Procaps Group SA has no effect on the direction of Shuttle Pharmaceuticals i.e., Shuttle Pharmaceuticals and Procaps Group go up and down completely randomly.

Pair Corralation between Shuttle Pharmaceuticals and Procaps Group

Given the investment horizon of 90 days Shuttle Pharmaceuticals is expected to under-perform the Procaps Group. But the stock apears to be less risky and, when comparing its historical volatility, Shuttle Pharmaceuticals is 2.24 times less risky than Procaps Group. The stock trades about -0.17 of its potential returns per unit of risk. The Procaps Group SA is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  184.00  in Procaps Group SA on September 5, 2024 and sell it today you would lose (42.00) from holding Procaps Group SA or give up 22.83% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Shuttle Pharmaceuticals  vs.  Procaps Group SA

Shuttle Pharmaceuticals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Shuttle Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Procaps Group SA

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Procaps Group SA are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Procaps Group exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Shuttle Pharmaceuticals and Procaps Group

The main advantage of trading using opposite Shuttle Pharmaceuticals and Procaps Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shuttle Pharmaceuticals position performs unexpectedly, Procaps Group 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 Procaps Group will offset losses from the drop in Procaps Group's long position.

The idea behind Shuttle Pharmaceuticals and Procaps Group SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.