Correlation Between Phibro Animal and Esperion Therapeutics
Can any of the company-specific risk be diversified away by investing in both Phibro Animal 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 Phibro Animal and Esperion Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Phibro Animal Health and Esperion Therapeutics, you can compare the effects of market volatilities on Phibro Animal 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 Phibro Animal with a short position of Esperion Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Phibro Animal and Esperion Therapeutics.
Diversification Opportunities for Phibro Animal and Esperion Therapeutics
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Phibro and Esperion is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Phibro Animal Health and Esperion Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Esperion Therapeutics and Phibro Animal 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 Phibro Animal Health 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 Phibro Animal i.e., Phibro Animal and Esperion Therapeutics go up and down completely randomly.
Pair Corralation between Phibro Animal and Esperion Therapeutics
Given the investment horizon of 90 days Phibro Animal is expected to generate 19.34 times less return on investment than Esperion Therapeutics. But when comparing it to its historical volatility, Phibro Animal Health is 2.41 times less risky than Esperion Therapeutics. It trades about 0.04 of its potential returns per unit of risk. Esperion Therapeutics is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 203.00 in Esperion Therapeutics on September 2, 2024 and sell it today you would earn a total of 77.00 from holding Esperion Therapeutics or generate 37.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Phibro Animal Health vs. Esperion Therapeutics
Performance |
| Timeline |
| Phibro Animal Health |
| Esperion Therapeutics |
Phibro Animal and Esperion Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Phibro Animal and Esperion Therapeutics
The main advantage of trading using opposite Phibro Animal and Esperion Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Phibro Animal 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.| Phibro Animal vs. Pacira BioSciences, | Phibro Animal vs. Dr Reddys Laboratories | Phibro Animal vs. Collegium Pharmaceutical | Phibro Animal vs. ANI Pharmaceuticals |
| 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.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |