Correlation Between Esperion Therapeutics and BriaCell Therapeutics

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

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

Diversification Opportunities for Esperion Therapeutics and BriaCell Therapeutics

0.59

Correlation Coefficient

Esperion Therapeutics  BriaCell Therapeutics

Very weak diversification

The 3 months correlation between Esperion and BriaCell is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Esperion Therapeutics and BriaCell Therapeutics Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BriaCell Therapeutics 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 BriaCell Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BriaCell Therapeutics has no effect on the direction of Esperion Therapeutics i.e., Esperion Therapeutics and BriaCell Therapeutics go up and down completely randomly.

Pair Corralation between Esperion Therapeutics and BriaCell Therapeutics

Given the investment horizon of 90 days Esperion Therapeutics is expected to generate 0.54 times more return on investment than BriaCell Therapeutics. However, Esperion Therapeutics is 1.87 times less risky than BriaCell Therapeutics. It trades about 0.05 of its potential returns per unit of risk. BriaCell Therapeutics Corp is currently generating about -0.04 per unit of risk. If you would invest  206.00  in Esperion Therapeutics on October 20, 2024 and sell it today you would earn a total of  15.00  from holding Esperion Therapeutics or generate 7.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	96.77%
Values	Daily Returns

Esperion Therapeutics  vs.  BriaCell Therapeutics Corp

Esperion Therapeutics

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Esperion Therapeutics are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating basic indicators, Esperion Therapeutics reported solid returns over the last few months and may actually be approaching a breakup point.

BriaCell Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BriaCell Therapeutics Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Esperion Therapeutics and BriaCell Therapeutics

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

The idea behind Esperion Therapeutics and BriaCell Therapeutics Corp 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.

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.