Correlation Between Esperion Therapeutics and Ascendis Pharma

Can any of the company-specific risk be diversified away by investing in both Esperion Therapeutics and Ascendis Pharma 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 Esperion Therapeutics and Ascendis Pharma into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Esperion Therapeutics and Ascendis Pharma AS, you can compare the effects of market volatilities on Esperion Therapeutics and Ascendis Pharma 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 Esperion Therapeutics with a short position of Ascendis Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Esperion Therapeutics and Ascendis Pharma.

Diversification Opportunities for Esperion Therapeutics and Ascendis Pharma

-0.58

Correlation Coefficient

Esperion Therapeutics  Ascendis Pharma

Excellent diversification

The 3 months correlation between Esperion and Ascendis is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Esperion Therapeutics and Ascendis Pharma AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ascendis Pharma AS and Esperion Therapeutics 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 Esperion Therapeutics are associated (or correlated) with Ascendis Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ascendis Pharma AS has no effect on the direction of Esperion Therapeutics i.e., Esperion Therapeutics and Ascendis Pharma go up and down completely randomly.

Pair Corralation between Esperion Therapeutics and Ascendis Pharma

Given the investment horizon of 90 days Esperion Therapeutics is expected to under-perform the Ascendis Pharma. In addition to that, Esperion Therapeutics is 1.05 times more volatile than Ascendis Pharma AS. It trades about -0.14 of its total potential returns per unit of risk. Ascendis Pharma AS is currently generating about 0.08 per unit of volatility. If you would invest  13,648  in Ascendis Pharma AS on December 30, 2024 and sell it today you would earn a total of  1,820  from holding Ascendis Pharma AS or generate 13.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Esperion Therapeutics  vs.  Ascendis Pharma AS

Esperion Therapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Esperion Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unfluctuating performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Ascendis Pharma AS

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ascendis Pharma AS are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, Ascendis Pharma exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Esperion Therapeutics and Ascendis Pharma

The main advantage of trading using opposite Esperion Therapeutics and Ascendis Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Esperion Therapeutics position performs unexpectedly, Ascendis Pharma 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 Ascendis Pharma will offset losses from the drop in Ascendis Pharma's long position.

The idea behind Esperion Therapeutics and Ascendis Pharma AS 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.

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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 Global Correlations module to find global opportunities by holding instruments from different markets.