Correlation Between Funko and Esperion Therapeutics
Can any of the company-specific risk be diversified away by investing in both Funko 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 Funko and Esperion Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Funko Inc and Esperion Therapeutics, you can compare the effects of market volatilities on Funko 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 Funko with a short position of Esperion Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Funko and Esperion Therapeutics.
Diversification Opportunities for Funko and Esperion Therapeutics
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Funko and Esperion is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Funko Inc and Esperion Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Esperion Therapeutics and Funko 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 Funko Inc 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 Funko i.e., Funko and Esperion Therapeutics go up and down completely randomly.
Pair Corralation between Funko and Esperion Therapeutics
Given the investment horizon of 90 days Funko Inc is expected to generate 0.77 times more return on investment than Esperion Therapeutics. However, Funko Inc is 1.3 times less risky than Esperion Therapeutics. It trades about -0.11 of its potential returns per unit of risk. Esperion Therapeutics is currently generating about -0.19 per unit of risk. If you would invest 1,365 in Funko Inc on November 30, 2024 and sell it today you would lose (137.00) from holding Funko Inc or give up 10.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Funko Inc vs. Esperion Therapeutics
Performance |
| Timeline |
| Funko Inc |
| Esperion Therapeutics |
Funko and Esperion Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Funko and Esperion Therapeutics
The main advantage of trading using opposite Funko and Esperion Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Funko 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.The idea behind Funko Inc and Esperion Therapeutics 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.| Esperion Therapeutics vs. Elanco Animal Health | Esperion Therapeutics vs. SIGA Technologies | Esperion Therapeutics vs. ANI Pharmaceuticals | Esperion Therapeutics vs. Phibro Animal Health |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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