Correlation Between Esperion Therapeutics and Planet Fitness
Can any of the company-specific risk be diversified away by investing in both Esperion Therapeutics and Planet Fitness 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 Planet Fitness into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Esperion Therapeutics and Planet Fitness, you can compare the effects of market volatilities on Esperion Therapeutics and Planet Fitness 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 Planet Fitness. Check out your portfolio center. Please also check ongoing floating volatility patterns of Esperion Therapeutics and Planet Fitness.
Diversification Opportunities for Esperion Therapeutics and Planet Fitness
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Esperion and Planet is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Esperion Therapeutics and Planet Fitness in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Planet Fitness 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 Planet Fitness. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Planet Fitness has no effect on the direction of Esperion Therapeutics i.e., Esperion Therapeutics and Planet Fitness go up and down completely randomly.
Pair Corralation between Esperion Therapeutics and Planet Fitness
Given the investment horizon of 90 days Esperion Therapeutics is expected to generate 1.92 times more return on investment than Planet Fitness. However, Esperion Therapeutics is 1.92 times more volatile than Planet Fitness. It trades about 0.31 of its potential returns per unit of risk. Planet Fitness is currently generating about 0.42 per unit of risk. If you would invest 204.00 in Esperion Therapeutics on September 1, 2024 and sell it today you would earn a total of 76.00 from holding Esperion Therapeutics or generate 37.25% 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. Planet Fitness
Performance |
| Timeline |
| Esperion Therapeutics |
| Planet Fitness |
Esperion Therapeutics and Planet Fitness Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Esperion Therapeutics and Planet Fitness
The main advantage of trading using opposite Esperion Therapeutics and Planet Fitness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Esperion Therapeutics position performs unexpectedly, Planet Fitness 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 Planet Fitness will offset losses from the drop in Planet Fitness' long position.| Esperion Therapeutics vs. Tff Pharmaceuticals | Esperion Therapeutics vs. Eliem Therapeutics | Esperion Therapeutics vs. Inhibrx | Esperion Therapeutics vs. Enliven Therapeutics |
| Planet Fitness vs. The Wendys Co | Planet Fitness vs. Shake Shack | Planet Fitness vs. Papa Johns International | Planet Fitness vs. Darden Restaurants |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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