Correlation Between Esperion Therapeutics and Sonida Senior
Can any of the company-specific risk be diversified away by investing in both Esperion Therapeutics and Sonida Senior 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 Sonida Senior into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Esperion Therapeutics and Sonida Senior Living, you can compare the effects of market volatilities on Esperion Therapeutics and Sonida Senior 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 Sonida Senior. Check out your portfolio center. Please also check ongoing floating volatility patterns of Esperion Therapeutics and Sonida Senior.
Diversification Opportunities for Esperion Therapeutics and Sonida Senior
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Esperion and Sonida is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Esperion Therapeutics and Sonida Senior Living in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sonida Senior Living 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 Sonida Senior. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sonida Senior Living has no effect on the direction of Esperion Therapeutics i.e., Esperion Therapeutics and Sonida Senior go up and down completely randomly.
Pair Corralation between Esperion Therapeutics and Sonida Senior
Given the investment horizon of 90 days Esperion Therapeutics is expected to under-perform the Sonida Senior. In addition to that, Esperion Therapeutics is 1.28 times more volatile than Sonida Senior Living. It trades about -0.01 of its total potential returns per unit of risk. Sonida Senior Living is currently generating about 0.06 per unit of volatility. If you would invest 1,164 in Sonida Senior Living on November 19, 2024 and sell it today you would earn a total of 1,386 from holding Sonida Senior Living or generate 119.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Esperion Therapeutics vs. Sonida Senior Living
Performance |
| Timeline |
| Esperion Therapeutics |
| Sonida Senior Living |
Esperion Therapeutics and Sonida Senior Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Esperion Therapeutics and Sonida Senior
The main advantage of trading using opposite Esperion Therapeutics and Sonida Senior positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Esperion Therapeutics position performs unexpectedly, Sonida Senior 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 Sonida Senior will offset losses from the drop in Sonida Senior'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 |
| Sonida Senior vs. Select Medical Holdings | Sonida Senior vs. Encompass Health Corp | Sonida Senior vs. Pennant Group | Sonida Senior vs. InnovAge Holding 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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