Correlation Between Esperion Therapeutics and Tilray
Can any of the company-specific risk be diversified away by investing in both Esperion Therapeutics and Tilray 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 Tilray into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Esperion Therapeutics and Tilray Inc, you can compare the effects of market volatilities on Esperion Therapeutics and Tilray 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 Tilray. Check out your portfolio center. Please also check ongoing floating volatility patterns of Esperion Therapeutics and Tilray.
Diversification Opportunities for Esperion Therapeutics and Tilray
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Esperion and Tilray is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Esperion Therapeutics and Tilray Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tilray Inc 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 Tilray. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tilray Inc has no effect on the direction of Esperion Therapeutics i.e., Esperion Therapeutics and Tilray go up and down completely randomly.
Pair Corralation between Esperion Therapeutics and Tilray
Given the investment horizon of 90 days Esperion Therapeutics is expected to generate 0.82 times more return on investment than Tilray. However, Esperion Therapeutics is 1.22 times less risky than Tilray. It trades about -0.14 of its potential returns per unit of risk. Tilray Inc is currently generating about -0.39 per unit of risk. If you would invest 215.00 in Esperion Therapeutics on December 5, 2024 and sell it today you would lose (43.50) from holding Esperion Therapeutics or give up 20.23% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 97.5% |
Values | Daily Returns |
Esperion Therapeutics vs. Tilray Inc
Performance |
Timeline |
Esperion Therapeutics |
Tilray Inc |
Esperion Therapeutics and Tilray Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Esperion Therapeutics and Tilray
The main advantage of trading using opposite Esperion Therapeutics and Tilray positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Esperion Therapeutics position performs unexpectedly, Tilray 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 Tilray will offset losses from the drop in Tilray's long position.Esperion Therapeutics vs. Elanco Animal Health | Esperion Therapeutics vs. SIGA Technologies | Esperion Therapeutics vs. ANI Pharmaceuticals | Esperion Therapeutics vs. Phibro Animal Health |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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