Correlation Between Eton Pharmaceuticals and Harrow Health
Can any of the company-specific risk be diversified away by investing in both Eton Pharmaceuticals and Harrow 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 Eton Pharmaceuticals and Harrow Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eton Pharmaceuticals and Harrow Health, you can compare the effects of market volatilities on Eton Pharmaceuticals and Harrow 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 Eton Pharmaceuticals with a short position of Harrow Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eton Pharmaceuticals and Harrow Health.
Diversification Opportunities for Eton Pharmaceuticals and Harrow Health
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Eton and Harrow is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Eton Pharmaceuticals and Harrow Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harrow Health and Eton 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 Eton Pharmaceuticals are associated (or correlated) with Harrow Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harrow Health has no effect on the direction of Eton Pharmaceuticals i.e., Eton Pharmaceuticals and Harrow Health go up and down completely randomly.
Pair Corralation between Eton Pharmaceuticals and Harrow Health
Given the investment horizon of 90 days Eton Pharmaceuticals is expected to generate 0.89 times more return on investment than Harrow Health. However, Eton Pharmaceuticals is 1.12 times less risky than Harrow Health. It trades about 0.37 of its potential returns per unit of risk. Harrow Health is currently generating about -0.07 per unit of risk. If you would invest 842.00 in Eton Pharmaceuticals on August 28, 2024 and sell it today you would earn a total of 361.00 from holding Eton Pharmaceuticals or generate 42.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eton Pharmaceuticals vs. Harrow Health
Performance |
| Timeline |
| Eton Pharmaceuticals |
| Harrow Health |
Eton Pharmaceuticals and Harrow Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eton Pharmaceuticals and Harrow Health
The main advantage of trading using opposite Eton Pharmaceuticals and Harrow Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eton Pharmaceuticals position performs unexpectedly, Harrow 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 Harrow Health will offset losses from the drop in Harrow Health's long position.| Eton Pharmaceuticals vs. Connect Biopharma Holdings | Eton Pharmaceuticals vs. Acumen Pharmaceuticals | Eton Pharmaceuticals vs. Nuvation Bio | Eton Pharmaceuticals vs. Eledon Pharmaceuticals |
| Harrow Health vs. Apyx Medical | Harrow Health vs. Eton Pharmaceuticals | Harrow Health vs. Scpharmaceuticals | Harrow Health vs. Fennec 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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