Correlation Between Marfrig Global and Esperion Therapeutics
Can any of the company-specific risk be diversified away by investing in both Marfrig Global 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 Marfrig Global and Esperion Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marfrig Global Foods and Esperion Therapeutics, you can compare the effects of market volatilities on Marfrig Global 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 Marfrig Global with a short position of Esperion Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marfrig Global and Esperion Therapeutics.
Diversification Opportunities for Marfrig Global and Esperion Therapeutics
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Marfrig and Esperion is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Marfrig Global Foods and Esperion Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Esperion Therapeutics and Marfrig Global 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 Marfrig Global Foods 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 Marfrig Global i.e., Marfrig Global and Esperion Therapeutics go up and down completely randomly.
Pair Corralation between Marfrig Global and Esperion Therapeutics
Assuming the 90 days horizon Marfrig Global Foods is expected to generate 1.55 times more return on investment than Esperion Therapeutics. However, Marfrig Global is 1.55 times more volatile than Esperion Therapeutics. It trades about 0.09 of its potential returns per unit of risk. Esperion Therapeutics is currently generating about -0.11 per unit of risk. If you would invest 265.00 in Marfrig Global Foods on December 1, 2024 and sell it today you would earn a total of 15.00 from holding Marfrig Global Foods or generate 5.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marfrig Global Foods vs. Esperion Therapeutics
Performance |
| Timeline |
| Marfrig Global Foods |
| Esperion Therapeutics |
Marfrig Global and Esperion Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marfrig Global and Esperion Therapeutics
The main advantage of trading using opposite Marfrig Global and Esperion Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marfrig Global 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.| Marfrig Global vs. BRF SA ADR | Marfrig Global vs. Pilgrims Pride Corp | Marfrig Global vs. John B Sanfilippo | Marfrig Global vs. Seneca Foods Corp |
| 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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