Correlation Between BioXcel Therapeutics and Sarepta Therapeutics
Can any of the company-specific risk be diversified away by investing in both BioXcel 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 BioXcel 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 BioXcel Therapeutics and Sarepta Therapeutics, you can compare the effects of market volatilities on BioXcel 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 BioXcel Therapeutics with a short position of Sarepta Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of BioXcel Therapeutics and Sarepta Therapeutics.
Diversification Opportunities for BioXcel Therapeutics and Sarepta Therapeutics
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between BioXcel and Sarepta is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding BioXcel Therapeutics and Sarepta Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sarepta Therapeutics and BioXcel 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 BioXcel 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 BioXcel Therapeutics i.e., BioXcel Therapeutics and Sarepta Therapeutics go up and down completely randomly.
Pair Corralation between BioXcel Therapeutics and Sarepta Therapeutics
Given the investment horizon of 90 days BioXcel Therapeutics is expected to generate 6.33 times more return on investment than Sarepta Therapeutics. However, BioXcel Therapeutics is 6.33 times more volatile than Sarepta Therapeutics. It trades about -0.02 of its potential returns per unit of risk. Sarepta Therapeutics is currently generating about -0.24 per unit of risk. If you would invest 39.00 in BioXcel Therapeutics on November 3, 2024 and sell it today you would lose (6.00) from holding BioXcel Therapeutics or give up 15.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
BioXcel Therapeutics vs. Sarepta Therapeutics
Performance |
| Timeline |
| BioXcel Therapeutics |
| Sarepta Therapeutics |
BioXcel Therapeutics and Sarepta Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BioXcel Therapeutics and Sarepta Therapeutics
The main advantage of trading using opposite BioXcel Therapeutics and Sarepta Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BioXcel 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.| BioXcel Therapeutics vs. Terns Pharmaceuticals | BioXcel Therapeutics vs. Amylyx Pharmaceuticals | BioXcel Therapeutics vs. Acumen Pharmaceuticals | BioXcel Therapeutics vs. Inozyme Pharma |
| 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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