Correlation Between Eagle Pharmaceuticals and Supernus Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Eagle Pharmaceuticals and Supernus Pharmaceuticals 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 Supernus Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eagle Pharmaceuticals and Supernus Pharmaceuticals, you can compare the effects of market volatilities on Eagle Pharmaceuticals and Supernus Pharmaceuticals 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 Supernus Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Pharmaceuticals and Supernus Pharmaceuticals.
Diversification Opportunities for Eagle Pharmaceuticals and Supernus Pharmaceuticals
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Eagle and Supernus is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Pharmaceuticals and Supernus Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Supernus Pharmaceuticals 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 Supernus Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Supernus Pharmaceuticals has no effect on the direction of Eagle Pharmaceuticals i.e., Eagle Pharmaceuticals and Supernus Pharmaceuticals go up and down completely randomly.
Pair Corralation between Eagle Pharmaceuticals and Supernus Pharmaceuticals
Given the investment horizon of 90 days Eagle Pharmaceuticals is expected to under-perform the Supernus Pharmaceuticals. In addition to that, Eagle Pharmaceuticals is 2.24 times more volatile than Supernus Pharmaceuticals. It trades about -0.1 of its total potential returns per unit of risk. Supernus Pharmaceuticals is currently generating about 0.01 per unit of volatility. If you would invest 3,561 in Supernus Pharmaceuticals on August 28, 2024 and sell it today you would earn a total of 49.00 from holding Supernus Pharmaceuticals or generate 1.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 92.73% |
| Values | Daily Returns |
Eagle Pharmaceuticals vs. Supernus Pharmaceuticals
Performance |
| Timeline |
| Eagle Pharmaceuticals |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Supernus Pharmaceuticals |
Eagle Pharmaceuticals and Supernus Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eagle Pharmaceuticals and Supernus Pharmaceuticals
The main advantage of trading using opposite Eagle Pharmaceuticals and Supernus Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagle Pharmaceuticals position performs unexpectedly, Supernus Pharmaceuticals 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 Supernus Pharmaceuticals will offset losses from the drop in Supernus Pharmaceuticals' long position.| Eagle Pharmaceuticals vs. ANI Pharmaceuticals | Eagle Pharmaceuticals vs. Phibro Animal Health | Eagle Pharmaceuticals vs. Prestige Brand Holdings | Eagle Pharmaceuticals vs. Collegium Pharmaceutical |
| Supernus Pharmaceuticals vs. Prestige Brand Holdings | Supernus Pharmaceuticals vs. Evotec SE ADR | Supernus Pharmaceuticals vs. Collegium Pharmaceutical | Supernus Pharmaceuticals vs. ANI Pharmaceuticals |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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