Correlation Between Eagle Pharmaceuticals and Guardian Pharmacy

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

By analyzing existing cross correlation between Eagle Pharmaceuticals and Guardian Pharmacy Services,, you can compare the effects of market volatilities on Eagle Pharmaceuticals and Guardian Pharmacy 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 Guardian Pharmacy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Pharmaceuticals and Guardian Pharmacy.

Diversification Opportunities for Eagle Pharmaceuticals and Guardian Pharmacy

-0.51

Correlation Coefficient

Eagle Pharmaceuticals  Guardian Pharmacy

Excellent diversification

The 3 months correlation between Eagle and Guardian is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Pharmaceuticals and Guardian Pharmacy Services, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guardian Pharmacy 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 Guardian Pharmacy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guardian Pharmacy has no effect on the direction of Eagle Pharmaceuticals i.e., Eagle Pharmaceuticals and Guardian Pharmacy go up and down completely randomly.

Pair Corralation between Eagle Pharmaceuticals and Guardian Pharmacy

If you would invest  199.00  in Eagle Pharmaceuticals on October 8, 2024 and sell it today you would earn a total of  0.00  from holding Eagle Pharmaceuticals or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	5.26%
Values	Daily Returns

Eagle Pharmaceuticals  vs.  Guardian Pharmacy Services,

Eagle Pharmaceuticals

Risk-Adjusted Performance

0 of 100

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.

Guardian Pharmacy

Risk-Adjusted Performance

3 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Guardian Pharmacy Services, are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady fundamental indicators, Guardian Pharmacy may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Eagle Pharmaceuticals and Guardian Pharmacy

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

The idea behind Eagle Pharmaceuticals and Guardian Pharmacy Services, 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.

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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.