Correlation Between Esperion Therapeutics and Nextnav Acquisition
Can any of the company-specific risk be diversified away by investing in both Esperion Therapeutics and Nextnav Acquisition 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 Nextnav Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Esperion Therapeutics and Nextnav Acquisition Corp, you can compare the effects of market volatilities on Esperion Therapeutics and Nextnav Acquisition 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 Nextnav Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Esperion Therapeutics and Nextnav Acquisition.
Diversification Opportunities for Esperion Therapeutics and Nextnav Acquisition
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Esperion and Nextnav is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Esperion Therapeutics and Nextnav Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nextnav Acquisition Corp 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 Nextnav Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nextnav Acquisition Corp has no effect on the direction of Esperion Therapeutics i.e., Esperion Therapeutics and Nextnav Acquisition go up and down completely randomly.
Pair Corralation between Esperion Therapeutics and Nextnav Acquisition
Given the investment horizon of 90 days Esperion Therapeutics is expected to generate 9.1 times less return on investment than Nextnav Acquisition. In addition to that, Esperion Therapeutics is 1.22 times more volatile than Nextnav Acquisition Corp. It trades about 0.01 of its total potential returns per unit of risk. Nextnav Acquisition Corp is currently generating about 0.1 per unit of volatility. If you would invest 274.00 in Nextnav Acquisition Corp on August 30, 2024 and sell it today you would earn a total of 1,399 from holding Nextnav Acquisition Corp or generate 510.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Esperion Therapeutics vs. Nextnav Acquisition Corp
Performance |
| Timeline |
| Esperion Therapeutics |
| Nextnav Acquisition Corp |
Esperion Therapeutics and Nextnav Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Esperion Therapeutics and Nextnav Acquisition
The main advantage of trading using opposite Esperion Therapeutics and Nextnav Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Esperion Therapeutics position performs unexpectedly, Nextnav Acquisition 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 Nextnav Acquisition will offset losses from the drop in Nextnav Acquisition's long position.| Esperion Therapeutics vs. Elanco Animal Health | Esperion Therapeutics vs. SIGA Technologies | Esperion Therapeutics vs. Catalent | Esperion Therapeutics vs. ANI Pharmaceuticals |
| Nextnav Acquisition vs. NetScout Systems | Nextnav Acquisition vs. Priority Technology Holdings | Nextnav Acquisition vs. OneSpan | Nextnav Acquisition vs. Consensus Cloud Solutions |
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 Managers module to screen money managers from public funds and ETFs managed around the world.
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