Correlation Between Esperion Therapeutics and ChampionX
Can any of the company-specific risk be diversified away by investing in both Esperion Therapeutics and ChampionX 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 ChampionX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Esperion Therapeutics and ChampionX, you can compare the effects of market volatilities on Esperion Therapeutics and ChampionX 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 ChampionX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Esperion Therapeutics and ChampionX.
Diversification Opportunities for Esperion Therapeutics and ChampionX
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Esperion and ChampionX is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Esperion Therapeutics and ChampionX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ChampionX 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 ChampionX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ChampionX has no effect on the direction of Esperion Therapeutics i.e., Esperion Therapeutics and ChampionX go up and down completely randomly.
Pair Corralation between Esperion Therapeutics and ChampionX
Given the investment horizon of 90 days Esperion Therapeutics is expected to generate 2.74 times more return on investment than ChampionX. However, Esperion Therapeutics is 2.74 times more volatile than ChampionX. It trades about 0.05 of its potential returns per unit of risk. ChampionX is currently generating about 0.04 per unit of risk. If you would invest 141.00 in Esperion Therapeutics on August 26, 2024 and sell it today you would earn a total of 111.00 from holding Esperion Therapeutics or generate 78.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Esperion Therapeutics vs. ChampionX
Performance |
| Timeline |
| Esperion Therapeutics |
| ChampionX |
Esperion Therapeutics and ChampionX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Esperion Therapeutics and ChampionX
The main advantage of trading using opposite Esperion Therapeutics and ChampionX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Esperion Therapeutics position performs unexpectedly, ChampionX 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 ChampionX will offset losses from the drop in ChampionX's long position.| Esperion Therapeutics vs. Eliem Therapeutics | Esperion Therapeutics vs. HCW Biologics | Esperion Therapeutics vs. Scpharmaceuticals | Esperion Therapeutics vs. Milestone Pharmaceuticals |
| ChampionX vs. Expro Group Holdings | ChampionX vs. Ranger Energy Services | ChampionX vs. Cactus Inc | ChampionX vs. MRC Global |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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