Correlation Between Agile Thrpe and Eagle Pharmaceuticals

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

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

Diversification Opportunities for Agile Thrpe and Eagle Pharmaceuticals

0.82

Correlation Coefficient

Agile Thrpe  Eagle Pharmaceuticals

Very poor diversification

The 3 months correlation between Agile and Eagle is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Agile Thrpe and Eagle Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Pharmaceuticals and Agile Thrpe 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 Agile Thrpe 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 Agile Thrpe i.e., Agile Thrpe and Eagle Pharmaceuticals go up and down completely randomly.

Pair Corralation between Agile Thrpe and Eagle Pharmaceuticals

Given the investment horizon of 90 days Agile Thrpe is expected to under-perform the Eagle Pharmaceuticals. In addition to that, Agile Thrpe is 1.08 times more volatile than Eagle Pharmaceuticals. It trades about -0.12 of its total potential returns per unit of risk. Eagle Pharmaceuticals is currently generating about -0.09 per unit of volatility. If you would invest  3,104  in Eagle Pharmaceuticals on September 3, 2024 and sell it today you would lose (2,905) from holding Eagle Pharmaceuticals or give up 93.59% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	33.63%
Values	Daily Returns

Agile Thrpe  vs.  Eagle Pharmaceuticals

Agile Thrpe

Risk-Adjusted Performance

0 of 100

Very Weak

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

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 January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Agile Thrpe and Eagle Pharmaceuticals

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

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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.