Correlation Between Eagle Pharmaceuticals and BrightSpring Health
Can any of the company-specific risk be diversified away by investing in both Eagle Pharmaceuticals and BrightSpring Health 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 Eagle Pharmaceuticals and BrightSpring Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eagle Pharmaceuticals and BrightSpring Health Services,, you can compare the effects of market volatilities on Eagle Pharmaceuticals and BrightSpring Health 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 Eagle Pharmaceuticals with a short position of BrightSpring Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Pharmaceuticals and BrightSpring Health.
Diversification Opportunities for Eagle Pharmaceuticals and BrightSpring Health
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Eagle and BrightSpring is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Pharmaceuticals and BrightSpring Health Services, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BrightSpring Health and Eagle 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 Eagle Pharmaceuticals are associated (or correlated) with BrightSpring Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BrightSpring Health has no effect on the direction of Eagle Pharmaceuticals i.e., Eagle Pharmaceuticals and BrightSpring Health go up and down completely randomly.
Pair Corralation between Eagle Pharmaceuticals and BrightSpring Health
Given the investment horizon of 90 days Eagle Pharmaceuticals is expected to under-perform the BrightSpring Health. In addition to that, Eagle Pharmaceuticals is 2.31 times more volatile than BrightSpring Health Services,. It trades about -0.09 of its total potential returns per unit of risk. BrightSpring Health Services, is currently generating about 0.12 per unit of volatility. If you would invest 4,351 in BrightSpring Health Services, on September 3, 2024 and sell it today you would earn a total of 2,762 from holding BrightSpring Health Services, or generate 63.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 47.25% |
| Values | Daily Returns |
Eagle Pharmaceuticals vs. BrightSpring Health Services,
Performance |
| Timeline |
| Eagle Pharmaceuticals |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| BrightSpring Health |
Eagle Pharmaceuticals and BrightSpring Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eagle Pharmaceuticals and BrightSpring Health
The main advantage of trading using opposite Eagle Pharmaceuticals and BrightSpring Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagle Pharmaceuticals position performs unexpectedly, BrightSpring Health 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 BrightSpring Health will offset losses from the drop in BrightSpring Health's long position.| Eagle Pharmaceuticals vs. ANI Pharmaceuticals | Eagle Pharmaceuticals vs. Phibro Animal Health | Eagle Pharmaceuticals vs. Prestige Brand Holdings | Eagle Pharmaceuticals vs. Collegium Pharmaceutical |
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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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