Correlation Between Esperion Therapeutics and Cronos
Can any of the company-specific risk be diversified away by investing in both Esperion Therapeutics and Cronos 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 Cronos into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Esperion Therapeutics and Cronos Group, you can compare the effects of market volatilities on Esperion Therapeutics and Cronos 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 Cronos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Esperion Therapeutics and Cronos.
Diversification Opportunities for Esperion Therapeutics and Cronos
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Esperion and Cronos is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Esperion Therapeutics and Cronos Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cronos Group 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 Cronos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cronos Group has no effect on the direction of Esperion Therapeutics i.e., Esperion Therapeutics and Cronos go up and down completely randomly.
Pair Corralation between Esperion Therapeutics and Cronos
Given the investment horizon of 90 days Esperion Therapeutics is expected to generate 4.66 times more return on investment than Cronos. However, Esperion Therapeutics is 4.66 times more volatile than Cronos Group. It trades about 0.06 of its potential returns per unit of risk. Cronos Group is currently generating about -0.3 per unit of risk. If you would invest 243.00 in Esperion Therapeutics on September 13, 2024 and sell it today you would earn a total of 7.50 from holding Esperion Therapeutics or generate 3.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Esperion Therapeutics vs. Cronos Group
Performance |
| Timeline |
| Esperion Therapeutics |
| Cronos Group |
Esperion Therapeutics and Cronos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Esperion Therapeutics and Cronos
The main advantage of trading using opposite Esperion Therapeutics and Cronos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Esperion Therapeutics position performs unexpectedly, Cronos 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 Cronos will offset losses from the drop in Cronos' long position.| Esperion Therapeutics vs. Elanco Animal Health | Esperion Therapeutics vs. SIGA Technologies | Esperion Therapeutics vs. Catalent | Esperion Therapeutics vs. ANI Pharmaceuticals |
| Cronos vs. OrganiGram Holdings | Cronos vs. Aurora Cannabis | Cronos vs. SNDL Inc | Cronos vs. Canopy Growth Corp |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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