Correlation Between Natural Alternatives and Esperion Therapeutics
Can any of the company-specific risk be diversified away by investing in both Natural Alternatives 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 Natural Alternatives and Esperion Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Natural Alternatives International and Esperion Therapeutics, you can compare the effects of market volatilities on Natural Alternatives 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 Natural Alternatives with a short position of Esperion Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Natural Alternatives and Esperion Therapeutics.
Diversification Opportunities for Natural Alternatives and Esperion Therapeutics
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Natural and Esperion is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Natural Alternatives Internati and Esperion Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Esperion Therapeutics and Natural Alternatives 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 Natural Alternatives International 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 Natural Alternatives i.e., Natural Alternatives and Esperion Therapeutics go up and down completely randomly.
Pair Corralation between Natural Alternatives and Esperion Therapeutics
Given the investment horizon of 90 days Natural Alternatives International is expected to under-perform the Esperion Therapeutics. But the stock apears to be less risky and, when comparing its historical volatility, Natural Alternatives International is 1.89 times less risky than Esperion Therapeutics. The stock trades about -0.02 of its potential returns per unit of risk. The Esperion Therapeutics is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 618.00 in Esperion Therapeutics on August 29, 2024 and sell it today you would lose (364.00) from holding Esperion Therapeutics or give up 58.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Natural Alternatives Internati vs. Esperion Therapeutics
Performance |
| Timeline |
| Natural Alternatives |
| Esperion Therapeutics |
Natural Alternatives and Esperion Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Natural Alternatives and Esperion Therapeutics
The main advantage of trading using opposite Natural Alternatives and Esperion Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Natural Alternatives 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.| Natural Alternatives vs. Kellanova | Natural Alternatives vs. Lamb Weston Holdings | Natural Alternatives vs. Borealis Foods | Natural Alternatives vs. Central Garden Pet |
| 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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