Correlation Between Esperion Therapeutics and Compugen
Can any of the company-specific risk be diversified away by investing in both Esperion Therapeutics and Compugen 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 Compugen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Esperion Therapeutics and Compugen, you can compare the effects of market volatilities on Esperion Therapeutics and Compugen 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 Compugen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Esperion Therapeutics and Compugen.
Diversification Opportunities for Esperion Therapeutics and Compugen
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Esperion and Compugen is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Esperion Therapeutics and Compugen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compugen 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 Compugen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compugen has no effect on the direction of Esperion Therapeutics i.e., Esperion Therapeutics and Compugen go up and down completely randomly.
Pair Corralation between Esperion Therapeutics and Compugen
Given the investment horizon of 90 days Esperion Therapeutics is expected to generate 2.45 times less return on investment than Compugen. But when comparing it to its historical volatility, Esperion Therapeutics is 1.69 times less risky than Compugen. It trades about 0.04 of its potential returns per unit of risk. Compugen is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 63.00 in Compugen on November 27, 2024 and sell it today you would earn a total of 147.00 from holding Compugen or generate 233.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Esperion Therapeutics vs. Compugen
Performance |
| Timeline |
| Esperion Therapeutics |
| Compugen |
Esperion Therapeutics and Compugen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Esperion Therapeutics and Compugen
The main advantage of trading using opposite Esperion Therapeutics and Compugen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Esperion Therapeutics position performs unexpectedly, Compugen 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 Compugen will offset losses from the drop in Compugen's long position.| Esperion Therapeutics vs. Elanco Animal Health | Esperion Therapeutics vs. SIGA Technologies | Esperion Therapeutics vs. ANI Pharmaceuticals | Esperion Therapeutics vs. Phibro Animal Health |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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