Correlation Between Esperion Therapeutics and Lifecore Biomedical
Can any of the company-specific risk be diversified away by investing in both Esperion Therapeutics and Lifecore Biomedical 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 Lifecore Biomedical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Esperion Therapeutics and Lifecore Biomedical, you can compare the effects of market volatilities on Esperion Therapeutics and Lifecore Biomedical 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 Lifecore Biomedical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Esperion Therapeutics and Lifecore Biomedical.
Diversification Opportunities for Esperion Therapeutics and Lifecore Biomedical
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Esperion and Lifecore is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Esperion Therapeutics and Lifecore Biomedical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifecore Biomedical 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 Lifecore Biomedical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lifecore Biomedical has no effect on the direction of Esperion Therapeutics i.e., Esperion Therapeutics and Lifecore Biomedical go up and down completely randomly.
Pair Corralation between Esperion Therapeutics and Lifecore Biomedical
Given the investment horizon of 90 days Esperion Therapeutics is expected to generate 31.48 times less return on investment than Lifecore Biomedical. But when comparing it to its historical volatility, Esperion Therapeutics is 1.18 times less risky than Lifecore Biomedical. It trades about 0.0 of its potential returns per unit of risk. Lifecore Biomedical is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 613.00 in Lifecore Biomedical on August 28, 2024 and sell it today you would earn a total of 131.00 from holding Lifecore Biomedical or generate 21.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Esperion Therapeutics vs. Lifecore Biomedical
Performance |
| Timeline |
| Esperion Therapeutics |
| Lifecore Biomedical |
Esperion Therapeutics and Lifecore Biomedical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Esperion Therapeutics and Lifecore Biomedical
The main advantage of trading using opposite Esperion Therapeutics and Lifecore Biomedical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Esperion Therapeutics position performs unexpectedly, Lifecore Biomedical 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 Lifecore Biomedical will offset losses from the drop in Lifecore Biomedical's long position.| Esperion Therapeutics vs. Elanco Animal Health | Esperion Therapeutics vs. SIGA Technologies | Esperion Therapeutics vs. Catalent | Esperion Therapeutics vs. ANI Pharmaceuticals |
| Lifecore Biomedical vs. Eliem Therapeutics | Lifecore Biomedical vs. Scpharmaceuticals | Lifecore Biomedical vs. Milestone Pharmaceuticals | Lifecore Biomedical vs. Seres 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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