Correlation Between Amphastar and Esperion Therapeutics
Can any of the company-specific risk be diversified away by investing in both Amphastar and Esperion 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 Amphastar and Esperion Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amphastar P and Esperion Therapeutics, you can compare the effects of market volatilities on Amphastar and Esperion 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 Amphastar with a short position of Esperion Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amphastar and Esperion Therapeutics.
Diversification Opportunities for Amphastar and Esperion Therapeutics
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Amphastar and Esperion is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Amphastar P and Esperion Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Esperion Therapeutics and Amphastar 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 Amphastar P are associated (or correlated) with Esperion Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Esperion Therapeutics has no effect on the direction of Amphastar i.e., Amphastar and Esperion Therapeutics go up and down completely randomly.
Pair Corralation between Amphastar and Esperion Therapeutics
Given the investment horizon of 90 days Amphastar P is expected to generate 0.45 times more return on investment than Esperion Therapeutics. However, Amphastar P is 2.22 times less risky than Esperion Therapeutics. It trades about 0.05 of its potential returns per unit of risk. Esperion Therapeutics is currently generating about 0.01 per unit of risk. If you would invest 2,863 in Amphastar P on September 2, 2024 and sell it today you would earn a total of 1,656 from holding Amphastar P or generate 57.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amphastar P vs. Esperion Therapeutics
Performance |
| Timeline |
| Amphastar P |
| Esperion Therapeutics |
Amphastar and Esperion Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amphastar and Esperion Therapeutics
The main advantage of trading using opposite Amphastar and Esperion Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amphastar position performs unexpectedly, Esperion 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 Esperion Therapeutics will offset losses from the drop in Esperion Therapeutics' long position.| Amphastar vs. Collegium Pharmaceutical | Amphastar vs. Alkermes Plc | Amphastar vs. Evolus Inc | Amphastar vs. Neurocrine Biosciences |
| Esperion Therapeutics vs. Elanco Animal Health | Esperion Therapeutics vs. SIGA Technologies | Esperion Therapeutics vs. Catalent | Esperion Therapeutics vs. ANI Pharmaceuticals |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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