Correlation Between Regencell Bioscience and Eagle Pharmaceuticals

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

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

Diversification Opportunities for Regencell Bioscience and Eagle Pharmaceuticals

0.12

Correlation Coefficient

Regencell Bioscience  Eagle Pharmaceuticals

Average diversification

The 3 months correlation between Regencell and Eagle is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Regencell Bioscience Holdings and Eagle Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Pharmaceuticals and Regencell Bioscience 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 Regencell Bioscience 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 Regencell Bioscience i.e., Regencell Bioscience and Eagle Pharmaceuticals go up and down completely randomly.

Pair Corralation between Regencell Bioscience and Eagle Pharmaceuticals

If you would invest  199.00  in Eagle Pharmaceuticals on August 31, 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 Together
Strength	Insignificant
Accuracy	4.35%
Values	Daily Returns

Regencell Bioscience Holdings  vs.  Eagle Pharmaceuticals

Regencell Bioscience

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Regencell Bioscience Holdings are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating technical and fundamental indicators, Regencell Bioscience exhibited solid returns over the last few months and may actually be approaching a breakup point.

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 weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Regencell Bioscience and Eagle Pharmaceuticals

The main advantage of trading using opposite Regencell Bioscience and Eagle Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regencell Bioscience 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.

The idea behind Regencell Bioscience Holdings and Eagle Pharmaceuticals 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.