Correlation Between Sarepta Therapeutics and Galectin Therapeutics
Can any of the company-specific risk be diversified away by investing in both Sarepta Therapeutics and Galectin 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 Sarepta Therapeutics and Galectin Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sarepta Therapeutics and Galectin Therapeutics, you can compare the effects of market volatilities on Sarepta Therapeutics and Galectin 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 Sarepta Therapeutics with a short position of Galectin Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sarepta Therapeutics and Galectin Therapeutics.
Diversification Opportunities for Sarepta Therapeutics and Galectin Therapeutics
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sarepta and Galectin is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Sarepta Therapeutics and Galectin Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Galectin Therapeutics and Sarepta 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 Sarepta Therapeutics are associated (or correlated) with Galectin Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Galectin Therapeutics has no effect on the direction of Sarepta Therapeutics i.e., Sarepta Therapeutics and Galectin Therapeutics go up and down completely randomly.
Pair Corralation between Sarepta Therapeutics and Galectin Therapeutics
Given the investment horizon of 90 days Sarepta Therapeutics is expected to generate 0.35 times more return on investment than Galectin Therapeutics. However, Sarepta Therapeutics is 2.84 times less risky than Galectin Therapeutics. It trades about -0.06 of its potential returns per unit of risk. Galectin Therapeutics is currently generating about -0.02 per unit of risk. If you would invest 14,065 in Sarepta Therapeutics on November 3, 2024 and sell it today you would lose (2,693) from holding Sarepta Therapeutics or give up 19.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.2% |
| Values | Daily Returns |
Sarepta Therapeutics vs. Galectin Therapeutics
Performance |
| Timeline |
| Sarepta Therapeutics |
| Galectin Therapeutics |
Sarepta Therapeutics and Galectin Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sarepta Therapeutics and Galectin Therapeutics
The main advantage of trading using opposite Sarepta Therapeutics and Galectin Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sarepta Therapeutics position performs unexpectedly, Galectin 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 Galectin Therapeutics will offset losses from the drop in Galectin Therapeutics' long position.| Sarepta Therapeutics vs. Krystal Biotech | Sarepta Therapeutics vs. PTC Therapeutics | Sarepta Therapeutics vs. Iovance Biotherapeutics | Sarepta Therapeutics vs. Madrigal Pharmaceuticals |
| Galectin Therapeutics vs. Madrigal Pharmaceuticals | Galectin Therapeutics vs. Viking Therapeutics | Galectin Therapeutics vs. Sarepta Therapeutics | Galectin Therapeutics vs. Hepion 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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