Correlation Between Procaps Group and Eagle Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Procaps Group 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 Procaps Group and Eagle Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Procaps Group SA and Eagle Pharmaceuticals, you can compare the effects of market volatilities on Procaps Group 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 Procaps Group with a short position of Eagle Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Procaps Group and Eagle Pharmaceuticals.
Diversification Opportunities for Procaps Group and Eagle Pharmaceuticals
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Procaps and Eagle is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Procaps Group SA and Eagle Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Pharmaceuticals and Procaps Group 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 Procaps Group SA 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 Procaps Group i.e., Procaps Group and Eagle Pharmaceuticals go up and down completely randomly.
Pair Corralation between Procaps Group and Eagle Pharmaceuticals
Given the investment horizon of 90 days Procaps Group SA is expected to generate 1.34 times more return on investment than Eagle Pharmaceuticals. However, Procaps Group is 1.34 times more volatile than Eagle Pharmaceuticals. It trades about -0.02 of its potential returns per unit of risk. Eagle Pharmaceuticals is currently generating about -0.1 per unit of risk. If you would invest 604.00 in Procaps Group SA on August 24, 2024 and sell it today you would lose (493.00) from holding Procaps Group SA or give up 81.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 93.13% |
| Values | Daily Returns |
Procaps Group SA vs. Eagle Pharmaceuticals
Performance |
| Timeline |
| Procaps Group SA |
| Eagle Pharmaceuticals |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Procaps Group and Eagle Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Procaps Group and Eagle Pharmaceuticals
The main advantage of trading using opposite Procaps Group and Eagle Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Procaps Group 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.| Procaps Group vs. Phibro Animal Health | Procaps Group vs. Delta 9 Cannabis | Procaps Group vs. City View Green | Procaps Group vs. Benchmark Botanics |
| 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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