Correlation Between Esperion Therapeutics and Marfrig Global
Can any of the company-specific risk be diversified away by investing in both Esperion Therapeutics and Marfrig Global 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 Marfrig Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Esperion Therapeutics and Marfrig Global Foods, you can compare the effects of market volatilities on Esperion Therapeutics and Marfrig Global 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 Marfrig Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Esperion Therapeutics and Marfrig Global.
Diversification Opportunities for Esperion Therapeutics and Marfrig Global
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Esperion and Marfrig is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Esperion Therapeutics and Marfrig Global Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marfrig Global Foods 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 Marfrig Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marfrig Global Foods has no effect on the direction of Esperion Therapeutics i.e., Esperion Therapeutics and Marfrig Global go up and down completely randomly.
Pair Corralation between Esperion Therapeutics and Marfrig Global
Given the investment horizon of 90 days Esperion Therapeutics is expected to under-perform the Marfrig Global. But the stock apears to be less risky and, when comparing its historical volatility, Esperion Therapeutics is 1.55 times less risky than Marfrig Global. The stock trades about -0.11 of its potential returns per unit of risk. The Marfrig Global Foods is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 265.00 in Marfrig Global Foods on December 1, 2024 and sell it today you would earn a total of 15.00 from holding Marfrig Global Foods or generate 5.66% 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. Marfrig Global Foods
Performance |
| Timeline |
| Esperion Therapeutics |
| Marfrig Global Foods |
Esperion Therapeutics and Marfrig Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Esperion Therapeutics and Marfrig Global
The main advantage of trading using opposite Esperion Therapeutics and Marfrig Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Esperion Therapeutics position performs unexpectedly, Marfrig Global 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 Marfrig Global will offset losses from the drop in Marfrig Global'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 |
| Marfrig Global vs. BRF SA ADR | Marfrig Global vs. Pilgrims Pride Corp | Marfrig Global vs. John B Sanfilippo | Marfrig Global vs. Seneca Foods Corp |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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