Correlation Between Esperion Therapeutics and Dominari Holdings
Can any of the company-specific risk be diversified away by investing in both Esperion Therapeutics and Dominari Holdings 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 Dominari Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Esperion Therapeutics and Dominari Holdings, you can compare the effects of market volatilities on Esperion Therapeutics and Dominari Holdings 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 Dominari Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Esperion Therapeutics and Dominari Holdings.
Diversification Opportunities for Esperion Therapeutics and Dominari Holdings
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Esperion and Dominari is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Esperion Therapeutics and Dominari Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dominari Holdings 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 Dominari Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dominari Holdings has no effect on the direction of Esperion Therapeutics i.e., Esperion Therapeutics and Dominari Holdings go up and down completely randomly.
Pair Corralation between Esperion Therapeutics and Dominari Holdings
Given the investment horizon of 90 days Esperion Therapeutics is expected to generate 1.45 times more return on investment than Dominari Holdings. However, Esperion Therapeutics is 1.45 times more volatile than Dominari Holdings. It trades about 0.05 of its potential returns per unit of risk. Dominari Holdings is currently generating about -0.03 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Esperion Therapeutics vs. Dominari Holdings
Performance |
| Timeline |
| Esperion Therapeutics |
| Dominari Holdings |
Esperion Therapeutics and Dominari Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Esperion Therapeutics and Dominari Holdings
The main advantage of trading using opposite Esperion Therapeutics and Dominari Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Esperion Therapeutics position performs unexpectedly, Dominari Holdings 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 Dominari Holdings will offset losses from the drop in Dominari Holdings' long position.| Esperion Therapeutics vs. Eliem Therapeutics | Esperion Therapeutics vs. HCW Biologics | Esperion Therapeutics vs. Scpharmaceuticals | Esperion Therapeutics vs. Milestone Pharmaceuticals |
| Dominari Holdings vs. Eliem Therapeutics | Dominari Holdings vs. HCW Biologics | Dominari Holdings vs. Scpharmaceuticals | Dominari Holdings vs. Milestone Pharmaceuticals |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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