Correlation Between Esperion Therapeutics and Elanco Animal
Can any of the company-specific risk be diversified away by investing in both Esperion Therapeutics and Elanco Animal 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 Elanco Animal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Esperion Therapeutics and Elanco Animal Health, you can compare the effects of market volatilities on Esperion Therapeutics and Elanco Animal 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 Elanco Animal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Esperion Therapeutics and Elanco Animal.
Diversification Opportunities for Esperion Therapeutics and Elanco Animal
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Esperion and Elanco is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Esperion Therapeutics and Elanco Animal Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elanco Animal Health 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 Elanco Animal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elanco Animal Health has no effect on the direction of Esperion Therapeutics i.e., Esperion Therapeutics and Elanco Animal go up and down completely randomly.
Pair Corralation between Esperion Therapeutics and Elanco Animal
Given the investment horizon of 90 days Esperion Therapeutics is expected to generate 1.61 times more return on investment than Elanco Animal. However, Esperion Therapeutics is 1.61 times more volatile than Elanco Animal Health. It trades about 0.04 of its potential returns per unit of risk. Elanco Animal Health is currently generating about 0.0 per unit of risk. If you would invest 214.00 in Esperion Therapeutics on August 28, 2024 and sell it today you would earn a total of 43.00 from holding Esperion Therapeutics or generate 20.09% 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. Elanco Animal Health
Performance |
| Timeline |
| Esperion Therapeutics |
| Elanco Animal Health |
Esperion Therapeutics and Elanco Animal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Esperion Therapeutics and Elanco Animal
The main advantage of trading using opposite Esperion Therapeutics and Elanco Animal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Esperion Therapeutics position performs unexpectedly, Elanco Animal 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 Elanco Animal will offset losses from the drop in Elanco Animal's long position.| Esperion Therapeutics vs. Elanco Animal Health | Esperion Therapeutics vs. SIGA Technologies | Esperion Therapeutics vs. Catalent | Esperion Therapeutics vs. ANI Pharmaceuticals |
| Elanco Animal vs. Capricor Therapeutics | Elanco Animal vs. Soleno Therapeutics | Elanco Animal vs. Bio Path Holdings | Elanco Animal vs. Moleculin Biotech |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |