Correlation Between Esperion Therapeutics and Petros Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Esperion Therapeutics and Petros Pharmaceuticals 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 Petros Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Esperion Therapeutics and Petros Pharmaceuticals, you can compare the effects of market volatilities on Esperion Therapeutics and Petros Pharmaceuticals 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 Petros Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Esperion Therapeutics and Petros Pharmaceuticals.
Diversification Opportunities for Esperion Therapeutics and Petros Pharmaceuticals
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Esperion and Petros is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Esperion Therapeutics and Petros Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petros Pharmaceuticals 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 Petros Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Petros Pharmaceuticals has no effect on the direction of Esperion Therapeutics i.e., Esperion Therapeutics and Petros Pharmaceuticals go up and down completely randomly.
Pair Corralation between Esperion Therapeutics and Petros Pharmaceuticals
Given the investment horizon of 90 days Esperion Therapeutics is expected to under-perform the Petros Pharmaceuticals. But the stock apears to be less risky and, when comparing its historical volatility, Esperion Therapeutics is 2.99 times less risky than Petros Pharmaceuticals. The stock trades about 0.0 of its potential returns per unit of risk. The Petros Pharmaceuticals is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 365.00 in Petros Pharmaceuticals on August 24, 2024 and sell it today you would lose (338.00) from holding Petros Pharmaceuticals or give up 92.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Esperion Therapeutics vs. Petros Pharmaceuticals
Performance |
| Timeline |
| Esperion Therapeutics |
| Petros Pharmaceuticals |
Esperion Therapeutics and Petros Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Esperion Therapeutics and Petros Pharmaceuticals
The main advantage of trading using opposite Esperion Therapeutics and Petros Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Esperion Therapeutics position performs unexpectedly, Petros Pharmaceuticals 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 Petros Pharmaceuticals will offset losses from the drop in Petros Pharmaceuticals' long position.| Esperion Therapeutics vs. Elanco Animal Health | Esperion Therapeutics vs. SIGA Technologies | Esperion Therapeutics vs. Catalent | Esperion Therapeutics vs. ANI Pharmaceuticals |
| Petros Pharmaceuticals vs. Sunshine Biopharma | Petros Pharmaceuticals vs. Sonoma Pharmaceuticals | Petros Pharmaceuticals vs. Alpha Teknova | Petros Pharmaceuticals vs. Evoke Pharma |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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