Correlation Between SFL and Esperion Therapeutics
Can any of the company-specific risk be diversified away by investing in both SFL 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 SFL and Esperion Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SFL Corporation and Esperion Therapeutics, you can compare the effects of market volatilities on SFL 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 SFL with a short position of Esperion Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of SFL and Esperion Therapeutics.
Diversification Opportunities for SFL and Esperion Therapeutics
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SFL and Esperion is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding SFL Corp. and Esperion Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Esperion Therapeutics and SFL 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 SFL Corporation 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 SFL i.e., SFL and Esperion Therapeutics go up and down completely randomly.
Pair Corralation between SFL and Esperion Therapeutics
Considering the 90-day investment horizon SFL Corporation is expected to under-perform the Esperion Therapeutics. But the stock apears to be less risky and, when comparing its historical volatility, SFL Corporation is 3.41 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 0.31 of returns per unit of risk over similar time horizon. If you would invest 204.00 in Esperion Therapeutics on September 1, 2024 and sell it today you would earn a total of 76.00 from holding Esperion Therapeutics or generate 37.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SFL Corp. vs. Esperion Therapeutics
Performance |
| Timeline |
| SFL Corporation |
| Esperion Therapeutics |
SFL and Esperion Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SFL and Esperion Therapeutics
The main advantage of trading using opposite SFL and Esperion Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SFL 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 SFL Corporation 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. Tff Pharmaceuticals | Esperion Therapeutics vs. Eliem Therapeutics | Esperion Therapeutics vs. Inhibrx | Esperion Therapeutics vs. Enliven Therapeutics |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |