Correlation Between Beam Therapeutics and Sarepta Therapeutics
Can any of the company-specific risk be diversified away by investing in both Beam Therapeutics 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 Beam Therapeutics and Sarepta Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Beam Therapeutics and Sarepta Therapeutics, you can compare the effects of market volatilities on Beam Therapeutics 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 Beam Therapeutics with a short position of Sarepta Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beam Therapeutics and Sarepta Therapeutics.
Diversification Opportunities for Beam Therapeutics and Sarepta Therapeutics
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Beam and Sarepta is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Beam Therapeutics and Sarepta Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sarepta Therapeutics and Beam 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 Beam Therapeutics 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 Beam Therapeutics i.e., Beam Therapeutics and Sarepta Therapeutics go up and down completely randomly.
Pair Corralation between Beam Therapeutics and Sarepta Therapeutics
Given the investment horizon of 90 days Beam Therapeutics is expected to generate 2.19 times more return on investment than Sarepta Therapeutics. However, Beam Therapeutics is 2.19 times more volatile than Sarepta Therapeutics. It trades about 0.13 of its potential returns per unit of risk. Sarepta Therapeutics is currently generating about -0.24 per unit of risk. If you would invest 2,235 in Beam Therapeutics on August 27, 2024 and sell it today you would earn a total of 270.00 from holding Beam Therapeutics or generate 12.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beam Therapeutics vs. Sarepta Therapeutics
Performance |
| Timeline |
| Beam Therapeutics |
| Sarepta Therapeutics |
Beam Therapeutics and Sarepta Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beam Therapeutics and Sarepta Therapeutics
The main advantage of trading using opposite Beam Therapeutics and Sarepta Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beam Therapeutics 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.| Beam Therapeutics vs. Editas Medicine | Beam Therapeutics vs. Crispr Therapeutics AG | Beam Therapeutics vs. Caribou Biosciences | Beam Therapeutics vs. Verve Therapeutics |
| 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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