Correlation Between Esperion Therapeutics and Anheuser Busch
Can any of the company-specific risk be diversified away by investing in both Esperion Therapeutics and Anheuser Busch 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 Anheuser Busch into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Esperion Therapeutics and Anheuser Busch Inbev, you can compare the effects of market volatilities on Esperion Therapeutics and Anheuser Busch 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 Anheuser Busch. Check out your portfolio center. Please also check ongoing floating volatility patterns of Esperion Therapeutics and Anheuser Busch.
Diversification Opportunities for Esperion Therapeutics and Anheuser Busch
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Esperion and Anheuser is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Esperion Therapeutics and Anheuser Busch Inbev in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anheuser Busch Inbev 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 Anheuser Busch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anheuser Busch Inbev has no effect on the direction of Esperion Therapeutics i.e., Esperion Therapeutics and Anheuser Busch go up and down completely randomly.
Pair Corralation between Esperion Therapeutics and Anheuser Busch
Given the investment horizon of 90 days Esperion Therapeutics is expected to generate 3.53 times more return on investment than Anheuser Busch. However, Esperion Therapeutics is 3.53 times more volatile than Anheuser Busch Inbev. It trades about 0.16 of its potential returns per unit of risk. Anheuser Busch Inbev is currently generating about -0.5 per unit of risk. If you would invest 213.00 in Esperion Therapeutics on August 29, 2024 and sell it today you would earn a total of 35.00 from holding Esperion Therapeutics or generate 16.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Esperion Therapeutics vs. Anheuser Busch Inbev
Performance |
| Timeline |
| Esperion Therapeutics |
| Anheuser Busch Inbev |
Esperion Therapeutics and Anheuser Busch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Esperion Therapeutics and Anheuser Busch
The main advantage of trading using opposite Esperion Therapeutics and Anheuser Busch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Esperion Therapeutics position performs unexpectedly, Anheuser Busch 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 Anheuser Busch will offset losses from the drop in Anheuser Busch's long position.| Esperion Therapeutics vs. Elanco Animal Health | Esperion Therapeutics vs. SIGA Technologies | Esperion Therapeutics vs. Catalent | Esperion Therapeutics vs. ANI Pharmaceuticals |
| Anheuser Busch vs. Fomento Economico Mexicano | Anheuser Busch vs. Carlsberg AS | Anheuser Busch vs. Molson Coors Beverage | Anheuser Busch vs. Molson Coors Brewing |
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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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