Correlation Between Eagle Pharmaceuticals and Cann American

Can any of the company-specific risk be diversified away by investing in both Eagle Pharmaceuticals and Cann American 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 Eagle Pharmaceuticals and Cann American into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Eagle Pharmaceuticals and Cann American Corp, you can compare the effects of market volatilities on Eagle Pharmaceuticals and Cann American 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 Eagle Pharmaceuticals with a short position of Cann American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Pharmaceuticals and Cann American.

Diversification Opportunities for Eagle Pharmaceuticals and Cann American

0.0

Correlation Coefficient

Eagle Pharmaceuticals  Cann American

Pay attention - limited upside

The 3 months correlation between Eagle and Cann is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Pharmaceuticals and Cann American Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cann American Corp and Eagle 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 Eagle Pharmaceuticals are associated (or correlated) with Cann American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cann American Corp has no effect on the direction of Eagle Pharmaceuticals i.e., Eagle Pharmaceuticals and Cann American go up and down completely randomly.

Pair Corralation between Eagle Pharmaceuticals and Cann American

If you would invest  0.40  in Cann American Corp on December 27, 2024 and sell it today you would lose (0.02) from holding Cann American Corp or give up 5.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Eagle Pharmaceuticals  vs.  Cann American Corp

Eagle Pharmaceuticals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Eagle Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Eagle Pharmaceuticals is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Cann American Corp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Cann American Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting basic indicators, Cann American sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Eagle Pharmaceuticals and Cann American

The main advantage of trading using opposite Eagle Pharmaceuticals and Cann American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagle Pharmaceuticals position performs unexpectedly, Cann American 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 Cann American will offset losses from the drop in Cann American's long position.

The idea behind Eagle Pharmaceuticals and Cann American Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..