Correlation Between Eagle Pharmaceuticals and Sangui Biotech

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

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

Diversification Opportunities for Eagle Pharmaceuticals and Sangui Biotech

0.0

Correlation Coefficient

Eagle Pharmaceuticals  Sangui Biotech

Pay attention - limited upside

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

Pair Corralation between Eagle Pharmaceuticals and Sangui Biotech

If you would invest  0.02  in Sangui Biotech International on December 28, 2024 and sell it today you would earn a total of  0.00  from holding Sangui Biotech International or generate 0.0% return on investment over 90 days.

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

Eagle Pharmaceuticals  vs.  Sangui Biotech International

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.

Sangui Biotech Inter

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sangui Biotech International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental drivers, Sangui Biotech is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Eagle Pharmaceuticals and Sangui Biotech

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

The idea behind Eagle Pharmaceuticals and Sangui Biotech International 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.