Correlation Between Esperion Therapeutics and AMCON Distributing
Can any of the company-specific risk be diversified away by investing in both Esperion Therapeutics and AMCON Distributing 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 AMCON Distributing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Esperion Therapeutics and AMCON Distributing, you can compare the effects of market volatilities on Esperion Therapeutics and AMCON Distributing 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 AMCON Distributing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Esperion Therapeutics and AMCON Distributing.
Diversification Opportunities for Esperion Therapeutics and AMCON Distributing
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Esperion and AMCON is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Esperion Therapeutics and AMCON Distributing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMCON Distributing 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 AMCON Distributing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMCON Distributing has no effect on the direction of Esperion Therapeutics i.e., Esperion Therapeutics and AMCON Distributing go up and down completely randomly.
Pair Corralation between Esperion Therapeutics and AMCON Distributing
Given the investment horizon of 90 days Esperion Therapeutics is expected to under-perform the AMCON Distributing. But the stock apears to be less risky and, when comparing its historical volatility, Esperion Therapeutics is 2.28 times less risky than AMCON Distributing. The stock trades about -0.11 of its potential returns per unit of risk. The AMCON Distributing is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 12,385 in AMCON Distributing on December 1, 2024 and sell it today you would earn a total of 814.00 from holding AMCON Distributing or generate 6.57% 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. AMCON Distributing
Performance |
| Timeline |
| Esperion Therapeutics |
| AMCON Distributing |
Esperion Therapeutics and AMCON Distributing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Esperion Therapeutics and AMCON Distributing
The main advantage of trading using opposite Esperion Therapeutics and AMCON Distributing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Esperion Therapeutics position performs unexpectedly, AMCON Distributing 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 AMCON Distributing will offset losses from the drop in AMCON Distributing'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 |
| AMCON Distributing vs. The Chefs Warehouse | AMCON Distributing vs. G Willi Food International | AMCON Distributing vs. SpartanNash Co | AMCON Distributing vs. Calavo Growers |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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