Correlation Between Beyond Meat and Esperion Therapeutics
Can any of the company-specific risk be diversified away by investing in both Beyond Meat 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 Beyond Meat and Esperion Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Beyond Meat and Esperion Therapeutics, you can compare the effects of market volatilities on Beyond Meat 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 Beyond Meat with a short position of Esperion Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beyond Meat and Esperion Therapeutics.
Diversification Opportunities for Beyond Meat and Esperion Therapeutics
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Beyond and Esperion is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Beyond Meat and Esperion Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Esperion Therapeutics and Beyond Meat 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 Beyond Meat 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 Beyond Meat i.e., Beyond Meat and Esperion Therapeutics go up and down completely randomly.
Pair Corralation between Beyond Meat and Esperion Therapeutics
Given the investment horizon of 90 days Beyond Meat is expected to under-perform the Esperion Therapeutics. But the stock apears to be less risky and, when comparing its historical volatility, Beyond Meat is 1.21 times less risky than Esperion Therapeutics. The stock trades about -0.02 of its potential returns per unit of risk. The Esperion Therapeutics is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 560.00 in Esperion Therapeutics on September 3, 2024 and sell it today you would lose (280.00) from holding Esperion Therapeutics or give up 50.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beyond Meat vs. Esperion Therapeutics
Performance |
| Timeline |
| Beyond Meat |
| Esperion Therapeutics |
Beyond Meat and Esperion Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beyond Meat and Esperion Therapeutics
The main advantage of trading using opposite Beyond Meat and Esperion Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beyond Meat 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.| Beyond Meat vs. Kraft Heinz Co | Beyond Meat vs. Hormel Foods | Beyond Meat vs. Kellanova | Beyond Meat vs. General Mills |
| 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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