Catalent appears to be very steady, given 3 months investment horizon. Catalent secures Sharpe Ratio (or Efficiency) of 0.25, which signifies that the company had 0.25% return per unit of risk over the last 3 months. Our standpoint towards foreseeing the volatility of a stock is to use all available market data together with stock-specific technical indicators that cannot be diversified away. By analyzing Catalent technical indicators you can presently evaluate if the expected return of 0.66% is justified by implied risk. Please makes use of Catalent's Risk Adjusted Performance of 0.2086, downside deviation of 2.27, and Mean Deviation of 2.12 to double-check if our risk estimates are consistent with your expectations. Key indicators related to Catalent's volatility include:
30 Days Market Risk
Chance Of Distress
30 Days Economic Sensitivity
Catalent Stock volatility depicts how high the prices fluctuate around the mean (or its average) price. In other words, it is a statistical measure of the distribution of Catalent daily returns, and it is calculated using variance and standard deviation. We also use Catalent's beta, its sensitivity to the market, as well as its odds of financial distress to provide a more practical estimation of Catalent volatility.
Since volatility provides investors with entry points to take advantage of stock prices, companies, such as Catalent can benefit from it. Downward market volatility can be a perfect environment for investors who play the long game. Here, they may decide to buy additional stocks of Catalent at lower prices. For example, an investor can purchase Catalent stock that has halved in price over a short period. This will lower your average cost per share, thereby improving your portfolio's performance when the markets normalize. Similarly, when the prices of Catalent's stock rises, investors can sell out and invest the proceeds in other equities with better opportunities. Investing when markets are volatile with better valuations will accord both investors and companies the opportunity to generate better long-term returns.
Moving together with Catalent Stock
Moving against Catalent Stock
Catalent Market Sensitivity And Downside Risk
Catalent's beta coefficient measures the volatility of Catalent stock compared to the systematic risk of the entire stock market represented by your selected benchmark. In mathematical terms, beta represents the slope of the line through a regression of data points where each of these points represents Catalent stock's returns against your selected market. In other words, Catalent's beta of 1.87 provides an investor with an approximation of how much risk Catalent stock can potentially add to one of your existing portfolios.Catalent currently demonstrates below-average downside deviation. It has Information Ratio of 0.24 and Jensen Alpha of 0.56. However, we advise investors to further question Catalent expected returns to ensure all indicators are consistent with the current outlook about its relatively low value at risk. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Catalent's stock risk against market volatility during both bullish and bearish trends. The higher level of volatility that comes with bear markets can directly impact Catalent's stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different stocks as prices fall. 3 Months Beta |Analyze Catalent Demand TrendCheck current 90 days Catalent correlation with market (NYSE Composite)
Catalent standard deviation measures the daily dispersion of prices over your selected time horizon relative to its mean. Typical volatile equity has a high standard deviation, while the deviation of a stable instrument is usually low. As a downside, the standard deviation calculates all uncertainty as risk, even when it is in your favor, such as above-average returns.
It is essential to understand the difference between upside risk (as represented by Catalent's standard deviation) and the downside risk, which can be measured by semi-deviation or downside deviation of Catalent's daily returns or price. Since the actual investment returns on holding a position in catalent stock tend to have a non-normal distribution, there will be different probabilities for losses than for gains. The likelihood of losses is reflected in the downside risk of an investment in Catalent.
Using Catalent Put Option to Manage Risk
Put options written on Catalent grant holders of the option the right to sell a specified amount of Catalent at a specified price within a specified time frame. The put buyer has a limited loss and, while not fully unlimited gains, as the price of Catalent Stock cannot fall below zero, the put buyer does gain as the price drops. So, one way investors can hedge Catalent's position is by buying a put option against it. The put option used this way is usually referred to as insurance. If an undesired outcome occurs and loss on holding Catalent will be realized, the loss incurred will be offset by the profits made with the option trade.
Catalent's PUT expiring on 2024-03-15
Catalent Stock Volatility Analysis
Volatility refers to the frequency at which Catalent stock price increases or decreases within a specified period. These fluctuations usually indicate the level of risk that's associated with Catalent's price changes. Investors will then calculate the volatility of Catalent's stock to predict their future moves. A stock that has erratic price changes quickly hits new highs, and lows are considered highly volatile. A stock with relatively stable price changes has low volatility. A highly volatile stock is riskier, but the risk cuts both ways. Investing in highly volatile security can either be highly successful, or you may experience significant failure. There are two main types of Catalent's volatility:
Historical VolatilityThis type of stock volatility measures Catalent's fluctuations based on previous trends. It's commonly used to predict Catalent's future behavior based on its past. However, it cannot conclusively determine the future direction of the stock.
Implied VolatilityThis type of volatility provides a positive outlook on future price fluctuations for Catalent's current market price. This means that the stock will return to its initially predicted market price. This type of volatility can be derived from derivative instruments written on Catalent's to be redeemed at a future date.
Catalent Projected Return Density Against MarketGiven the investment horizon of 90 days the stock has the beta coefficient of 1.8684 suggesting as the benchmark fluctuates upward, the company is expected to outperform it on average. However, if the benchmark returns are projected to be negative, Catalent will likely underperform.
Most traded equities are subject to two types of risk - systematic (i.e., market) and unsystematic (i.e., nonmarket or company-specific) risk. Unsystematic risk is the risk that events specific to Catalent or Pharmaceuticals sector will adversely affect the stock's price. This type of risk can be diversified away by owning several different stocks in different industries whose stock prices have shown a small correlation to each other. On the other hand, systematic risk is the risk that Catalent's price will be affected by overall stock market movements and cannot be diversified away. So, no matter how many positions you have, you cannot eliminate market risk. However, you can measure a Catalent stock's historical response to market movements and buy it if you are comfortable with its volatility direction. Beta and standard deviation are two commonly used measures to help you make the right decision.The company has an alpha of 0.5579, implying that it can generate a 0.56 percent excess return over NYSE Composite after adjusting for the inherited market risk (beta). Catalent's volatility is measured either by using standard deviation or beta. Standard deviation will reflect the average amount of how catalent stock's price will differ from the mean after some time.To get its calculation, you should first determine the mean price during the specified period then subtract that from each price point.
What Drives a Catalent Price Volatility?Several factors can influence a stock's market volatility:
IndustrySpecific events can influence volatility within a particular industry. For instance, a significant weather upheaval in a crucial oil-production site may cause oil prices to increase in the oil sector. The direct result will be the rise in the stock price of oil distribution companies. Similarly, any government regulation in a specific industry could negatively influence stock prices due to increased regulations on compliance that may impact the company's future earnings and growth.
Political and Economic environmentWhen governments make significant decisions regarding trade agreements, policies, and legislation regarding specific industries, they will influence stock prices. Everything from speeches to elections may influence investors, who can directly influence the stock prices in any particular industry. The prevailing economic situation also plays a significant role in stock prices. When the economy is doing well, investors will have a positive reaction and hence, better stock prices and vice versa.
The Company's PerformanceSometimes volatility will only affect an individual company. For example, a revolutionary product launch or strong earnings report may attract many investors to purchase the company. This positive attention will raise the company's stock price. In contrast, product recalls and data breaches may negatively influence a company's stock prices.
Catalent Stock Risk Measures
Most traded equities are subject to two types of risk - systematic (i.e., market) and unsystematic (i.e., nonmarket or company-specific) risk. Unsystematic risk is the risk that events specific to Catalent or Pharmaceuticals sector will adversely affect the stock's price. This type of risk can be diversified away by owning several different stocks in different industries whose stock prices have shown a small correlation to each other. On the other hand, systematic risk is the risk that Catalent's price will be affected by overall stock market movements and cannot be diversified away. So, no matter how many positions you have, you cannot eliminate market risk. However, you can measure a Catalent stock's historical response to market movements and buy it if you are comfortable with its volatility direction. Beta and standard deviation are two commonly used measures to help you make the right decision. Given the investment horizon of 90 days the coefficient of variation of Catalent is 404.71. The daily returns are distributed with a variance of 7.15 and standard deviation of 2.67. The mean deviation of Catalent is currently at 1.95. For similar time horizon, the selected benchmark (NYSE Composite) has volatility of 0.67
Catalent Stock Return VolatilityCatalent historical daily return volatility represents how much of Catalent stock's daily returns swing around its mean - it is a statistical measure of its dispersion of returns. The firm inherits 2.6737% risk (volatility on return distribution) over the 90 days horizon. By contrast, NYSE Composite accepts 0.6451% volatility on return distribution over the 90 days horizon.
About Catalent Volatility
Volatility is a rate at which the price of Catalent or any other equity instrument increases or decreases for a given set of returns. It is measured by calculating the standard deviation of the annualized returns over a given period of time and shows the range to which the price of Catalent may increase or decrease. In other words, similar to Catalent's beta indicator, it measures the risk of Catalent and helps estimate the fluctuations that may happen in a short period of time. So if prices of Catalent fluctuate rapidly in a short time span, it is termed to have high volatility, and if it swings slowly in a more extended period, it is understood to have low volatility.Please read more on our technical analysis page.
|Projected for 2024
Catalent's stock volatility refers to the amount of uncertainty or risk involved with the size of changes in its stock's price. It is a statistical measure of the dispersion of returns on Catalent Stock over a specified period of time, often expressed as the standard deviation of daily returns. In other words, it measures how much Catalent's price varies over time.
3 ways to utilize Catalent's volatility to invest betterHigher Catalent's stock volatility means that the price of its stock is changing rapidly and unpredictably, while lower stock volatility indicates that the price of Catalent stock is relatively stable. Investors and traders use stock volatility as an indicator of risk and potential reward, as stocks with higher volatility can offer the potential for more significant returns but also come with a greater risk of losses. Catalent stock volatility can provide helpful information for making investment decisions in the following ways:
- Measuring Risk: Volatility can be used as a measure of risk, which can help you determine the potential fluctuations in the value of Catalent investment. A higher volatility means higher risk and potentially larger changes in value.
- Identifying Opportunities: High volatility in Catalent's stock can indicate that there is potential for significant price movements, either up or down, which could present investment opportunities.
- Diversification: Understanding how the volatility of Catalent's stock relates to your other investments can help you create a well-diversified portfolio of assets with varying levels of risk.
Catalent Investment OpportunityCatalent has a volatility of 2.67 and is 4.11 times more volatile than NYSE Composite. 23 of all equities and portfolios are less risky than Catalent. Compared to the overall equity markets, volatility of historical daily returns of Catalent is lower than 23 () of all global equities and portfolios over the last 90 days. Use Catalent to protect your portfolios against small market fluctuations. Benchmarks are essential to demonstrate the utility of optimization algorithms. The stock experiences a normal downward trend and little activity. Check odds of Catalent to be traded at $57.4 in 90 days.
Catalent Additional Risk Indicators
The analysis of Catalent's secondary risk indicators is one of the essential steps in making a buy or sell decision. The process involves identifying the amount of risk involved in Catalent's investment and either accepting that risk or mitigating it. Along with some common measures of Catalent stock's risk such as standard deviation, beta, or value at risk, we also provide a set of secondary indicators that can assist in the individual investment decision or help in hedging the risk of your existing portfolios.
Please note, the risk measures we provide can be used independently or collectively to perform a risk assessment. When comparing two potential stocks, we recommend comparing similar stocks with homogenous growth potential and valuation from related markets to determine which investment holds the most risk.
Catalent Suggested Diversification Pairs
Pair trading is one of the very effective strategies used by professional day traders and hedge funds capitalizing on short-time and mid-term market inefficiencies. The approach is based on the fact that the ratio of prices of two correlating shares is long-term stable and oscillates around the average value. If the correlation ratio comes outside the common area, you can speculate with a high success rate that the ratio will return to the mean value and collect a profit.
The effect of pair diversification on risk is to reduce it, but we should note this doesn't apply to all risk types. When we trade pairs against Catalent as a counterpart, there is always some inherent risk that will never be diversified away no matter what. This volatility limits the effect of tactical diversification using pair trading. Catalent's systematic risk is the inherent uncertainty of the entire market, and therefore cannot be mitigated even by pair-trading it against the equity that is not highly correlated to it. On the other hand, Catalent's unsystematic risk describes the types of risk that we can protect against, at least to some degree, by selecting a matching pair that is not perfectly correlated to Catalent.When determining whether Catalent is a good investment, qualitative aspects like company management, corporate governance, and ethical practices play a significant role. A comparison with peer companies also provides context and helps to understand if Catalent Stock is undervalued or overvalued. This multi-faceted approach, blending both quantitative and qualitative analysis, forms a solid foundation for making an informed investment decision about Catalent Stock. Highlighted below are key reports to facilitate an investment decision about Catalent Stock:
Check out Trending Equities to better understand how to build diversified portfolios, which includes a position in Catalent. Also, note that the market value of any Company could be tightly coupled with the direction of predictive economic indicators such as signals in bureau of economic analysis.For more information on how to buy Catalent Stock please use our How to Invest in Catalent guide.You can also try the Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Complementary Tools for Catalent Stock analysis
When running Catalent's price analysis, check to measure Catalent's market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy Catalent is operating at the current time. Most of Catalent's value examination focuses on studying past and present price action to predict the probability of Catalent's future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Catalent's price. Additionally, you may evaluate how the addition of Catalent to your portfolios can decrease your overall portfolio volatility.
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Is Catalent's industry expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Catalent. If investors know Catalent will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Catalent listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth
Revenue Per Share
Quarterly Revenue Growth
Return On Assets
The market value of Catalent is measured differently than its book value, which is the value of Catalent that is recorded on the company's balance sheet. Investors also form their own opinion of Catalent's value that differs from its market value or its book value, called intrinsic value, which is Catalent's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Catalent's market value can be influenced by many factors that don't directly affect Catalent's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Catalent's value and its price as these two are different measures arrived at by different means. Investors typically determine if Catalent is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Catalent's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.