Correlation Between Kezar Life and Sarepta Therapeutics
Can any of the company-specific risk be diversified away by investing in both Kezar Life 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 Kezar Life and Sarepta Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kezar Life Sciences and Sarepta Therapeutics, you can compare the effects of market volatilities on Kezar Life 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 Kezar Life with a short position of Sarepta Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kezar Life and Sarepta Therapeutics.
Diversification Opportunities for Kezar Life and Sarepta Therapeutics
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kezar and Sarepta is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Kezar Life Sciences and Sarepta Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sarepta Therapeutics and Kezar Life 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 Kezar Life Sciences 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 Kezar Life i.e., Kezar Life and Sarepta Therapeutics go up and down completely randomly.
Pair Corralation between Kezar Life and Sarepta Therapeutics
Considering the 90-day investment horizon Kezar Life Sciences is expected to under-perform the Sarepta Therapeutics. In addition to that, Kezar Life is 1.24 times more volatile than Sarepta Therapeutics. It trades about -0.07 of its total potential returns per unit of risk. Sarepta Therapeutics is currently generating about 0.03 per unit of volatility. If you would invest 11,836 in Sarepta Therapeutics on August 30, 2024 and sell it today you would earn a total of 1,958 from holding Sarepta Therapeutics or generate 16.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kezar Life Sciences vs. Sarepta Therapeutics
Performance |
| Timeline |
| Kezar Life Sciences |
| Sarepta Therapeutics |
Kezar Life and Sarepta Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kezar Life and Sarepta Therapeutics
The main advantage of trading using opposite Kezar Life and Sarepta Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kezar Life 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.| Kezar Life vs. Century Therapeutics | Kezar Life vs. Mineralys Therapeutics, Common | Kezar Life vs. Nkarta Inc | Kezar Life vs. Surrozen |
| 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |