Correlation Between Lifecore Biomedical and Eagle Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Lifecore Biomedical and Eagle 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 Lifecore Biomedical and Eagle Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lifecore Biomedical and Eagle Pharmaceuticals, you can compare the effects of market volatilities on Lifecore Biomedical and Eagle 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 Lifecore Biomedical with a short position of Eagle Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lifecore Biomedical and Eagle Pharmaceuticals.
Diversification Opportunities for Lifecore Biomedical and Eagle Pharmaceuticals
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lifecore and Eagle is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Lifecore Biomedical and Eagle Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Pharmaceuticals and Lifecore Biomedical 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 Lifecore Biomedical are associated (or correlated) with Eagle Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Pharmaceuticals has no effect on the direction of Lifecore Biomedical i.e., Lifecore Biomedical and Eagle Pharmaceuticals go up and down completely randomly.
Pair Corralation between Lifecore Biomedical and Eagle Pharmaceuticals
Given the investment horizon of 90 days Lifecore Biomedical is expected to generate 1.4 times more return on investment than Eagle Pharmaceuticals. However, Lifecore Biomedical is 1.4 times more volatile than Eagle Pharmaceuticals. It trades about 0.04 of its potential returns per unit of risk. Eagle Pharmaceuticals is currently generating about -0.1 per unit of risk. If you would invest 612.00 in Lifecore Biomedical on August 27, 2024 and sell it today you would earn a total of 119.00 from holding Lifecore Biomedical or generate 19.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 92.09% |
| Values | Daily Returns |
Lifecore Biomedical vs. Eagle Pharmaceuticals
Performance |
| Timeline |
| Lifecore Biomedical |
| Eagle Pharmaceuticals |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Lifecore Biomedical and Eagle Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lifecore Biomedical and Eagle Pharmaceuticals
The main advantage of trading using opposite Lifecore Biomedical and Eagle Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lifecore Biomedical position performs unexpectedly, Eagle 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 Eagle Pharmaceuticals will offset losses from the drop in Eagle Pharmaceuticals' long position.| Lifecore Biomedical vs. Shuttle Pharmaceuticals | Lifecore Biomedical vs. Catalent | Lifecore Biomedical vs. Tilray Inc | Lifecore Biomedical vs. Kamada |
| 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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