Correlation Between Agios Pharm and Sarepta Therapeutics
Can any of the company-specific risk be diversified away by investing in both Agios Pharm and Sarepta 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 Agios Pharm and Sarepta Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agios Pharm and Sarepta Therapeutics, you can compare the effects of market volatilities on Agios Pharm and Sarepta 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 Agios Pharm with a short position of Sarepta Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agios Pharm and Sarepta Therapeutics.
Diversification Opportunities for Agios Pharm and Sarepta Therapeutics
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Agios and Sarepta is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Agios Pharm and Sarepta Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sarepta Therapeutics and Agios Pharm 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 Agios Pharm are associated (or correlated) with Sarepta Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sarepta Therapeutics has no effect on the direction of Agios Pharm i.e., Agios Pharm and Sarepta Therapeutics go up and down completely randomly.
Pair Corralation between Agios Pharm and Sarepta Therapeutics
Given the investment horizon of 90 days Agios Pharm is expected to generate 0.78 times more return on investment than Sarepta Therapeutics. However, Agios Pharm is 1.29 times less risky than Sarepta Therapeutics. It trades about 0.06 of its potential returns per unit of risk. Sarepta Therapeutics is currently generating about 0.02 per unit of risk. If you would invest 2,924 in Agios Pharm on September 2, 2024 and sell it today you would earn a total of 3,015 from holding Agios Pharm or generate 103.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Agios Pharm vs. Sarepta Therapeutics
Performance |
| Timeline |
| Agios Pharm |
| Sarepta Therapeutics |
Agios Pharm and Sarepta Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agios Pharm and Sarepta Therapeutics
The main advantage of trading using opposite Agios Pharm and Sarepta Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agios Pharm position performs unexpectedly, Sarepta 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 Sarepta Therapeutics will offset losses from the drop in Sarepta Therapeutics' long position.| Agios Pharm vs. Mereo BioPharma Group | Agios Pharm vs. Blueprint Medicines Corp | Agios Pharm vs. Day One Biopharmaceuticals | Agios Pharm vs. Biomarin Pharmaceutical |
| Sarepta Therapeutics vs. Krystal Biotech | Sarepta Therapeutics vs. PTC Therapeutics | Sarepta Therapeutics vs. Iovance Biotherapeutics | Sarepta Therapeutics vs. Madrigal 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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