Correlation Between Eagle Pharmaceuticals and Raphael Pharmaceutical

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

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

Diversification Opportunities for Eagle Pharmaceuticals and Raphael Pharmaceutical

0.0

Correlation Coefficient

Eagle Pharmaceuticals  Raphael Pharmaceutical

Pay attention - limited upside

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

Pair Corralation between Eagle Pharmaceuticals and Raphael Pharmaceutical

If you would invest  26.00  in Raphael Pharmaceutical on December 1, 2024 and sell it today you would earn a total of  74.00  from holding Raphael Pharmaceutical or generate 284.62% return on investment over 90 days.

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

Eagle Pharmaceuticals  vs.  Raphael Pharmaceutical

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.

Raphael Pharmaceutical

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Raphael Pharmaceutical are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Raphael Pharmaceutical demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Eagle Pharmaceuticals and Raphael Pharmaceutical

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

The idea behind Eagle Pharmaceuticals and Raphael Pharmaceutical 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.