Correlation Between Esperion Therapeutics and LENNAR
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By analyzing existing cross correlation between Esperion Therapeutics and LENNAR P 525, you can compare the effects of market volatilities on Esperion Therapeutics and LENNAR 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 LENNAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Esperion Therapeutics and LENNAR.
Diversification Opportunities for Esperion Therapeutics and LENNAR
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Esperion and LENNAR is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Esperion Therapeutics and LENNAR P 525 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LENNAR P 525 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 LENNAR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LENNAR P 525 has no effect on the direction of Esperion Therapeutics i.e., Esperion Therapeutics and LENNAR go up and down completely randomly.
Pair Corralation between Esperion Therapeutics and LENNAR
Given the investment horizon of 90 days Esperion Therapeutics is expected to generate 14.06 times more return on investment than LENNAR. However, Esperion Therapeutics is 14.06 times more volatile than LENNAR P 525. It trades about 0.06 of its potential returns per unit of risk. LENNAR P 525 is currently generating about 0.0 per unit of risk. If you would invest 135.00 in Esperion Therapeutics on August 31, 2024 and sell it today you would earn a total of 145.00 from holding Esperion Therapeutics or generate 107.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 93.85% |
| Values | Daily Returns |
Esperion Therapeutics vs. LENNAR P 525
Performance |
| Timeline |
| Esperion Therapeutics |
| LENNAR P 525 |
Esperion Therapeutics and LENNAR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Esperion Therapeutics and LENNAR
The main advantage of trading using opposite Esperion Therapeutics and LENNAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Esperion Therapeutics position performs unexpectedly, LENNAR 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 LENNAR will offset losses from the drop in LENNAR's long position.The idea behind Esperion Therapeutics and LENNAR P 525 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| LENNAR vs. Western Sierra Mining | LENNAR vs. NioCorp Developments Ltd | LENNAR vs. Logan Ridge Finance | LENNAR vs. Peoples Educational Holdings |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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