Correlation Between Esperion Therapeutics and Alimera Sciences
Can any of the company-specific risk be diversified away by investing in both Esperion Therapeutics and Alimera Sciences 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 Alimera Sciences into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Esperion Therapeutics and Alimera Sciences, you can compare the effects of market volatilities on Esperion Therapeutics and Alimera Sciences 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 Alimera Sciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Esperion Therapeutics and Alimera Sciences.
Diversification Opportunities for Esperion Therapeutics and Alimera Sciences
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Esperion and Alimera is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Esperion Therapeutics and Alimera Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alimera Sciences 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 Alimera Sciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alimera Sciences has no effect on the direction of Esperion Therapeutics i.e., Esperion Therapeutics and Alimera Sciences go up and down completely randomly.
Pair Corralation between Esperion Therapeutics and Alimera Sciences
If you would invest 168.00 in Esperion Therapeutics on August 28, 2024 and sell it today you would earn a total of 89.00 from holding Esperion Therapeutics or generate 52.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 2.38% |
| Values | Daily Returns |
Esperion Therapeutics vs. Alimera Sciences
Performance |
| Timeline |
| Esperion Therapeutics |
| Alimera Sciences |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Esperion Therapeutics and Alimera Sciences Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Esperion Therapeutics and Alimera Sciences
The main advantage of trading using opposite Esperion Therapeutics and Alimera Sciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Esperion Therapeutics position performs unexpectedly, Alimera Sciences 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 Alimera Sciences will offset losses from the drop in Alimera Sciences' long position.| Esperion Therapeutics vs. Eliem Therapeutics | Esperion Therapeutics vs. HCW Biologics | Esperion Therapeutics vs. Scpharmaceuticals | Esperion Therapeutics vs. Milestone Pharmaceuticals |
| Alimera Sciences vs. Shuttle Pharmaceuticals | Alimera Sciences vs. Lifecore Biomedical | Alimera Sciences vs. Journey Medical Corp | Alimera Sciences vs. Organogenesis Holdings |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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