Correlation Between Esperion Therapeutics and Brickell Biotech
Can any of the company-specific risk be diversified away by investing in both Esperion Therapeutics and Brickell Biotech 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 Brickell Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Esperion Therapeutics and Brickell Biotech, you can compare the effects of market volatilities on Esperion Therapeutics and Brickell Biotech 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 Brickell Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Esperion Therapeutics and Brickell Biotech.
Diversification Opportunities for Esperion Therapeutics and Brickell Biotech
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Esperion and Brickell is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Esperion Therapeutics and Brickell Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brickell Biotech 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 Brickell Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brickell Biotech has no effect on the direction of Esperion Therapeutics i.e., Esperion Therapeutics and Brickell Biotech go up and down completely randomly.
Pair Corralation between Esperion Therapeutics and Brickell Biotech
If you would invest 200.00 in Esperion Therapeutics on September 4, 2024 and sell it today you would earn a total of 125.00 from holding Esperion Therapeutics or generate 62.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Esperion Therapeutics vs. Brickell Biotech
Performance |
| Timeline |
| Esperion Therapeutics |
| Brickell Biotech |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Esperion Therapeutics and Brickell Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Esperion Therapeutics and Brickell Biotech
The main advantage of trading using opposite Esperion Therapeutics and Brickell Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Esperion Therapeutics position performs unexpectedly, Brickell Biotech 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 Brickell Biotech will offset losses from the drop in Brickell Biotech's long position.| Esperion Therapeutics vs. Candel Therapeutics | Esperion Therapeutics vs. Cingulate Warrants | Esperion Therapeutics vs. Unicycive Therapeutics | Esperion Therapeutics vs. Cardio Diagnostics Holdings |
| Brickell Biotech vs. Esperion Therapeutics | Brickell Biotech vs. Guangdong Investment Limited | Brickell Biotech vs. Solstad Offshore ASA | Brickell Biotech vs. Viemed Healthcare |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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