Correlation Between Esperion Therapeutics and Evoke Pharma
Can any of the company-specific risk be diversified away by investing in both Esperion Therapeutics and Evoke Pharma 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 Evoke Pharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Esperion Therapeutics and Evoke Pharma, you can compare the effects of market volatilities on Esperion Therapeutics and Evoke Pharma 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 Evoke Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Esperion Therapeutics and Evoke Pharma.
Diversification Opportunities for Esperion Therapeutics and Evoke Pharma
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Esperion and Evoke is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Esperion Therapeutics and Evoke Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evoke Pharma 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 Evoke Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evoke Pharma has no effect on the direction of Esperion Therapeutics i.e., Esperion Therapeutics and Evoke Pharma go up and down completely randomly.
Pair Corralation between Esperion Therapeutics and Evoke Pharma
Given the investment horizon of 90 days Esperion Therapeutics is expected to generate 1.02 times more return on investment than Evoke Pharma. However, Esperion Therapeutics is 1.02 times more volatile than Evoke Pharma. It trades about 0.07 of its potential returns per unit of risk. Evoke Pharma is currently generating about -0.04 per unit of risk. If you would invest 148.00 in Esperion Therapeutics on September 12, 2024 and sell it today you would earn a total of 156.00 from holding Esperion Therapeutics or generate 105.41% 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. Evoke Pharma
Performance |
| Timeline |
| Esperion Therapeutics |
| Evoke Pharma |
Esperion Therapeutics and Evoke Pharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Esperion Therapeutics and Evoke Pharma
The main advantage of trading using opposite Esperion Therapeutics and Evoke Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Esperion Therapeutics position performs unexpectedly, Evoke Pharma 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 Evoke Pharma will offset losses from the drop in Evoke Pharma's long position.| Esperion Therapeutics vs. Evoke Pharma | Esperion Therapeutics vs. Lantheus Holdings | Esperion Therapeutics vs. ANI Pharmaceuticals | Esperion Therapeutics vs. Ironwood Pharmaceuticals |
| Evoke Pharma vs. Petros Pharmaceuticals | Evoke Pharma vs. Cumberland Pharmaceuticals | Evoke Pharma vs. Painreform | Evoke Pharma vs. Aquestive Therapeutics |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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