Correlation Between Sihuan Pharmaceutical and Eagle Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Sihuan Pharmaceutical 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 Sihuan Pharmaceutical and Eagle Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sihuan Pharmaceutical Holdings and Eagle Pharmaceuticals, you can compare the effects of market volatilities on Sihuan Pharmaceutical 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 Sihuan Pharmaceutical with a short position of Eagle Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sihuan Pharmaceutical and Eagle Pharmaceuticals.
Diversification Opportunities for Sihuan Pharmaceutical and Eagle Pharmaceuticals
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sihuan and Eagle is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Sihuan Pharmaceutical Holdings and Eagle Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Pharmaceuticals and Sihuan Pharmaceutical 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 Sihuan Pharmaceutical Holdings 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 Sihuan Pharmaceutical i.e., Sihuan Pharmaceutical and Eagle Pharmaceuticals go up and down completely randomly.
Pair Corralation between Sihuan Pharmaceutical and Eagle Pharmaceuticals
Assuming the 90 days horizon Sihuan Pharmaceutical Holdings is expected to generate 1.56 times more return on investment than Eagle Pharmaceuticals. However, Sihuan Pharmaceutical is 1.56 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 10.00 in Sihuan Pharmaceutical Holdings on November 5, 2024 and sell it today you would lose (0.50) from holding Sihuan Pharmaceutical Holdings or give up 5.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.27% |
| Values | Daily Returns |
Sihuan Pharmaceutical Holdings vs. Eagle Pharmaceuticals
Performance |
| Timeline |
| Sihuan Pharmaceutical |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Eagle Pharmaceuticals |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Sihuan Pharmaceutical and Eagle Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sihuan Pharmaceutical and Eagle Pharmaceuticals
The main advantage of trading using opposite Sihuan Pharmaceutical and Eagle Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sihuan Pharmaceutical 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.| Sihuan Pharmaceutical vs. Procaps Group SA | Sihuan Pharmaceutical vs. Phibro Animal Health | Sihuan Pharmaceutical vs. Cann American Corp | Sihuan Pharmaceutical vs. Shuttle Pharmaceuticals |
| 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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