Correlation Between Esperion Therapeutics and Serina Therapeutics
Can any of the company-specific risk be diversified away by investing in both Esperion Therapeutics and Serina Therapeutics 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 Esperion Therapeutics and Serina Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Esperion Therapeutics and Serina Therapeutics, you can compare the effects of market volatilities on Esperion Therapeutics and Serina Therapeutics 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 Esperion Therapeutics with a short position of Serina Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Esperion Therapeutics and Serina Therapeutics.
Diversification Opportunities for Esperion Therapeutics and Serina Therapeutics
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Esperion and Serina is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Esperion Therapeutics and Serina Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Serina Therapeutics and Esperion Therapeutics 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 Esperion Therapeutics are associated (or correlated) with Serina Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Serina Therapeutics has no effect on the direction of Esperion Therapeutics i.e., Esperion Therapeutics and Serina Therapeutics go up and down completely randomly.
Pair Corralation between Esperion Therapeutics and Serina Therapeutics
Given the investment horizon of 90 days Esperion Therapeutics is expected to generate 0.81 times more return on investment than Serina Therapeutics. However, Esperion Therapeutics is 1.24 times less risky than Serina Therapeutics. It trades about 0.13 of its potential returns per unit of risk. Serina Therapeutics is currently generating about -0.03 per unit of risk. If you would invest 168.00 in Esperion Therapeutics on September 20, 2024 and sell it today you would earn a total of 78.00 from holding Esperion Therapeutics or generate 46.43% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Esperion Therapeutics vs. Serina Therapeutics
Performance |
Timeline |
Esperion Therapeutics |
Serina Therapeutics |
Esperion Therapeutics and Serina Therapeutics Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Esperion Therapeutics and Serina Therapeutics
The main advantage of trading using opposite Esperion Therapeutics and Serina Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Esperion Therapeutics position performs unexpectedly, Serina Therapeutics 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 Serina Therapeutics will offset losses from the drop in Serina Therapeutics' long position.Esperion Therapeutics vs. Elanco Animal Health | ||
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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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