Correlation Between Evoke Pharma and Esperion Therapeutics
Can any of the company-specific risk be diversified away by investing in both Evoke Pharma and Esperion Therapeutics 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 Evoke Pharma and Esperion Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Evoke Pharma and Esperion Therapeutics, you can compare the effects of market volatilities on Evoke Pharma and Esperion Therapeutics 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 Evoke Pharma with a short position of Esperion Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evoke Pharma and Esperion Therapeutics.
Diversification Opportunities for Evoke Pharma and Esperion Therapeutics
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Evoke and Esperion is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Evoke Pharma and Esperion Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Esperion Therapeutics and Evoke Pharma 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 Evoke Pharma are associated (or correlated) with Esperion Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Esperion Therapeutics has no effect on the direction of Evoke Pharma i.e., Evoke Pharma and Esperion Therapeutics go up and down completely randomly.
Pair Corralation between Evoke Pharma and Esperion Therapeutics
Given the investment horizon of 90 days Evoke Pharma is expected to under-perform the Esperion Therapeutics. But the stock apears to be less risky and, when comparing its historical volatility, Evoke Pharma is 1.92 times less risky than Esperion Therapeutics. The stock trades about -0.18 of its potential returns per unit of risk. The Esperion Therapeutics is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 243.00 in Esperion Therapeutics on September 13, 2024 and sell it today you would earn a total of 7.50 from holding Esperion Therapeutics or generate 3.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Evoke Pharma vs. Esperion Therapeutics
Performance |
| Timeline |
| Evoke Pharma |
| Esperion Therapeutics |
Evoke Pharma and Esperion Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evoke Pharma and Esperion Therapeutics
The main advantage of trading using opposite Evoke Pharma and Esperion Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evoke Pharma position performs unexpectedly, Esperion Therapeutics 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 Esperion Therapeutics will offset losses from the drop in Esperion Therapeutics' long position.| Evoke Pharma vs. Petros Pharmaceuticals | Evoke Pharma vs. Cumberland Pharmaceuticals | Evoke Pharma vs. Painreform | Evoke Pharma vs. Aquestive Therapeutics |
| Esperion Therapeutics vs. Elanco Animal Health | Esperion Therapeutics vs. SIGA Technologies | Esperion Therapeutics vs. Catalent | Esperion Therapeutics vs. ANI Pharmaceuticals |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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