Correlation Between Eagle Pharmaceuticals and Cannamerica Brands
Can any of the company-specific risk be diversified away by investing in both Eagle Pharmaceuticals and Cannamerica Brands 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 Cannamerica Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eagle Pharmaceuticals and Cannamerica Brands Corp, you can compare the effects of market volatilities on Eagle Pharmaceuticals and Cannamerica Brands 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 Cannamerica Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Pharmaceuticals and Cannamerica Brands.
Diversification Opportunities for Eagle Pharmaceuticals and Cannamerica Brands
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Eagle and Cannamerica is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Pharmaceuticals and Cannamerica Brands Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cannamerica Brands Corp 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 Cannamerica Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cannamerica Brands Corp has no effect on the direction of Eagle Pharmaceuticals i.e., Eagle Pharmaceuticals and Cannamerica Brands go up and down completely randomly.
Pair Corralation between Eagle Pharmaceuticals and Cannamerica Brands
Given the investment horizon of 90 days Eagle Pharmaceuticals is expected to under-perform the Cannamerica Brands. In addition to that, Eagle Pharmaceuticals is 1.06 times more volatile than Cannamerica Brands Corp. It trades about -0.09 of its total potential returns per unit of risk. Cannamerica Brands Corp is currently generating about -0.05 per unit of volatility. If you would invest 0.49 in Cannamerica Brands Corp on August 31, 2024 and sell it today you would lose (0.49) from holding Cannamerica Brands Corp or give up 100.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 89.54% |
| Values | Daily Returns |
Eagle Pharmaceuticals vs. Cannamerica Brands Corp
Performance |
| Timeline |
| Eagle Pharmaceuticals |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Cannamerica Brands Corp |
Eagle Pharmaceuticals and Cannamerica Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eagle Pharmaceuticals and Cannamerica Brands
The main advantage of trading using opposite Eagle Pharmaceuticals and Cannamerica Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagle Pharmaceuticals position performs unexpectedly, Cannamerica Brands 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 Cannamerica Brands will offset losses from the drop in Cannamerica Brands' long position.| Eagle Pharmaceuticals vs. ANI Pharmaceuticals | Eagle Pharmaceuticals vs. Phibro Animal Health | Eagle Pharmaceuticals vs. Prestige Brand Holdings | Eagle Pharmaceuticals vs. Collegium Pharmaceutical |
| Cannamerica Brands vs. Holloman Energy Corp | Cannamerica Brands vs. cbdMD Inc | Cannamerica Brands vs. Evolus Inc | Cannamerica Brands vs. CV Sciences |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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