Correlation Between Pacira BioSciences, and Eagle Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Pacira BioSciences, 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 Pacira BioSciences, and Eagle Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pacira BioSciences, and Eagle Pharmaceuticals, you can compare the effects of market volatilities on Pacira BioSciences, 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 Pacira BioSciences, with a short position of Eagle Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pacira BioSciences, and Eagle Pharmaceuticals.
Diversification Opportunities for Pacira BioSciences, and Eagle Pharmaceuticals
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Pacira and Eagle is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Pacira BioSciences, and Eagle Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Pharmaceuticals and Pacira BioSciences, 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 Pacira BioSciences, 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 Pacira BioSciences, i.e., Pacira BioSciences, and Eagle Pharmaceuticals go up and down completely randomly.
Pair Corralation between Pacira BioSciences, and Eagle Pharmaceuticals
Given the investment horizon of 90 days Pacira BioSciences, is expected to generate 0.68 times more return on investment than Eagle Pharmaceuticals. However, Pacira BioSciences, is 1.47 times less risky 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 4,697 in Pacira BioSciences, on August 27, 2024 and sell it today you would lose (2,942) from holding Pacira BioSciences, or give up 62.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 92.74% |
| Values | Daily Returns |
Pacira BioSciences, vs. Eagle Pharmaceuticals
Performance |
| Timeline |
| Pacira BioSciences, |
| Eagle Pharmaceuticals |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Pacira BioSciences, and Eagle Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pacira BioSciences, and Eagle Pharmaceuticals
The main advantage of trading using opposite Pacira BioSciences, and Eagle Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pacira BioSciences, 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.| Pacira BioSciences, vs. Phibro Animal Health | Pacira BioSciences, vs. Dr Reddys Laboratories | Pacira BioSciences, vs. Collegium Pharmaceutical | Pacira BioSciences, vs. Prestige Brand Holdings |
| 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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