Correlation Between AMERICAN and Esperion Therapeutics
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By analyzing existing cross correlation between AMERICAN INTERNATIONAL GROUP and Esperion Therapeutics, you can compare the effects of market volatilities on AMERICAN 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 AMERICAN with a short position of Esperion Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMERICAN and Esperion Therapeutics.
Diversification Opportunities for AMERICAN and Esperion Therapeutics
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between AMERICAN and Esperion is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding AMERICAN INTERNATIONAL GROUP and Esperion Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Esperion Therapeutics and AMERICAN 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 AMERICAN INTERNATIONAL GROUP 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 AMERICAN i.e., AMERICAN and Esperion Therapeutics go up and down completely randomly.
Pair Corralation between AMERICAN and Esperion Therapeutics
Assuming the 90 days trading horizon AMERICAN INTERNATIONAL GROUP is expected to under-perform the Esperion Therapeutics. But the bond apears to be less risky and, when comparing its historical volatility, AMERICAN INTERNATIONAL GROUP is 6.76 times less risky than Esperion Therapeutics. The bond trades about -0.04 of its potential returns per unit of risk. The Esperion Therapeutics is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 212.00 in Esperion Therapeutics on September 3, 2024 and sell it today you would earn a total of 68.00 from holding Esperion Therapeutics or generate 32.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 89.73% |
| Values | Daily Returns |
AMERICAN INTERNATIONAL GROUP vs. Esperion Therapeutics
Performance |
| Timeline |
| AMERICAN INTERNATIONAL |
| Esperion Therapeutics |
AMERICAN and Esperion Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMERICAN and Esperion Therapeutics
The main advantage of trading using opposite AMERICAN and Esperion Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMERICAN 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 AMERICAN INTERNATIONAL GROUP 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. 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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