Correlation Between EGF Theramed and Cipher Pharmaceuticals

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

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

Diversification Opportunities for EGF Theramed and Cipher Pharmaceuticals

0.0

Correlation Coefficient

EGF Theramed  Cipher Pharmaceuticals

Pay attention - limited upside

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

Pair Corralation between EGF Theramed and Cipher Pharmaceuticals

If you would invest  9.40  in EGF Theramed Health on April 25, 2025 and sell it today you would lose (3.20) from holding EGF Theramed Health or give up 34.04% of portfolio value over 90 days.

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

EGF Theramed Health  vs.  Cipher Pharmaceuticals

EGF Theramed Health

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in EGF Theramed Health are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical indicators, EGF Theramed reported solid returns over the last few months and may actually be approaching a breakup point.

Cipher Pharmaceuticals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cipher Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Cipher Pharmaceuticals is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with EGF Theramed and Cipher Pharmaceuticals

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

The idea behind EGF Theramed Health and Cipher 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.