Correlation Between NYSE Composite and Sarepta Therapeutics
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Sarepta Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Sarepta Therapeutics, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Sarepta Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Sarepta Therapeutics.
Diversification Opportunities for NYSE Composite and Sarepta Therapeutics
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NYSE and Sarepta is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Sarepta Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sarepta Therapeutics and NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and Sarepta Therapeutics go up and down completely randomly.
Pair Corralation between NYSE Composite and Sarepta Therapeutics
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.18 times more return on investment than Sarepta Therapeutics. However, NYSE Composite is 5.59 times less risky than Sarepta Therapeutics. It trades about 0.1 of its potential returns per unit of risk. Sarepta Therapeutics is currently generating about 0.01 per unit of risk. If you would invest 1,538,087 in NYSE Composite on August 27, 2024 and sell it today you would earn a total of 474,258 from holding NYSE Composite or generate 30.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Sarepta Therapeutics
Performance |
| Timeline |
NYSE Composite and Sarepta Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Sarepta Therapeutics
Pair trading matchups for Sarepta Therapeutics
Pair Trading with NYSE Composite and Sarepta Therapeutics
The main advantage of trading using opposite NYSE Composite and Sarepta Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Grocery Outlet Holding | NYSE Composite vs. Tencent Music Entertainment | NYSE Composite vs. SunLink Health Systems | NYSE Composite vs. Getty Realty |
| 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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