Correlation Between Eagle Pharmaceuticals and Painreform
Can any of the company-specific risk be diversified away by investing in both Eagle Pharmaceuticals and Painreform 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 Painreform into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eagle Pharmaceuticals and Painreform, you can compare the effects of market volatilities on Eagle Pharmaceuticals and Painreform 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 Painreform. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Pharmaceuticals and Painreform.
Diversification Opportunities for Eagle Pharmaceuticals and Painreform
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Eagle and Painreform is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Pharmaceuticals and Painreform in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Painreform 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 Painreform. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Painreform has no effect on the direction of Eagle Pharmaceuticals i.e., Eagle Pharmaceuticals and Painreform go up and down completely randomly.
Pair Corralation between Eagle Pharmaceuticals and Painreform
Given the investment horizon of 90 days Eagle Pharmaceuticals is expected to under-perform the Painreform. But the pink sheet apears to be less risky and, when comparing its historical volatility, Eagle Pharmaceuticals is 3.61 times less risky than Painreform. The pink sheet trades about -0.09 of its potential returns per unit of risk. The Painreform is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 11,040 in Painreform on August 31, 2024 and sell it today you would lose (10,762) from holding Painreform or give up 97.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 89.3% |
| Values | Daily Returns |
Eagle Pharmaceuticals vs. Painreform
Performance |
| Timeline |
| Eagle Pharmaceuticals |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Painreform |
Eagle Pharmaceuticals and Painreform Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eagle Pharmaceuticals and Painreform
The main advantage of trading using opposite Eagle Pharmaceuticals and Painreform positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagle Pharmaceuticals position performs unexpectedly, Painreform 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 Painreform will offset losses from the drop in Painreform'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 |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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