Correlation Between Esperion Therapeutics and Sonnet Biotherapeutics
Can any of the company-specific risk be diversified away by investing in both Esperion Therapeutics and Sonnet Biotherapeutics 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 Sonnet Biotherapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Esperion Therapeutics and Sonnet Biotherapeutics Holdings, you can compare the effects of market volatilities on Esperion Therapeutics and Sonnet Biotherapeutics 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 Sonnet Biotherapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Esperion Therapeutics and Sonnet Biotherapeutics.
Diversification Opportunities for Esperion Therapeutics and Sonnet Biotherapeutics
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Esperion and Sonnet is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Esperion Therapeutics and Sonnet Biotherapeutics Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sonnet Biotherapeutics 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 Sonnet Biotherapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sonnet Biotherapeutics has no effect on the direction of Esperion Therapeutics i.e., Esperion Therapeutics and Sonnet Biotherapeutics go up and down completely randomly.
Pair Corralation between Esperion Therapeutics and Sonnet Biotherapeutics
Given the investment horizon of 90 days Esperion Therapeutics is expected to generate 0.86 times more return on investment than Sonnet Biotherapeutics. However, Esperion Therapeutics is 1.17 times less risky than Sonnet Biotherapeutics. It trades about 0.01 of its potential returns per unit of risk. Sonnet Biotherapeutics Holdings is currently generating about -0.1 per unit of risk. If you would invest 636.00 in Esperion Therapeutics on September 12, 2024 and sell it today you would lose (332.00) from holding Esperion Therapeutics or give up 52.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Esperion Therapeutics vs. Sonnet Biotherapeutics Holding
Performance |
| Timeline |
| Esperion Therapeutics |
| Sonnet Biotherapeutics |
Esperion Therapeutics and Sonnet Biotherapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Esperion Therapeutics and Sonnet Biotherapeutics
The main advantage of trading using opposite Esperion Therapeutics and Sonnet Biotherapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Esperion Therapeutics position performs unexpectedly, Sonnet Biotherapeutics 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 Sonnet Biotherapeutics will offset losses from the drop in Sonnet Biotherapeutics' long position.| Esperion Therapeutics vs. Evoke Pharma | Esperion Therapeutics vs. Lantheus Holdings | Esperion Therapeutics vs. ANI Pharmaceuticals | Esperion Therapeutics vs. Ironwood Pharmaceuticals |
| Sonnet Biotherapeutics vs. Equillium | Sonnet Biotherapeutics vs. DiaMedica Therapeutics | Sonnet Biotherapeutics vs. Valneva SE ADR | Sonnet Biotherapeutics vs. Vivani Medical |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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