Correlation Between Sarepta Therapeutics and Krystal Biotech
Can any of the company-specific risk be diversified away by investing in both Sarepta Therapeutics and Krystal Biotech 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 Krystal Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sarepta Therapeutics and Krystal Biotech, you can compare the effects of market volatilities on Sarepta Therapeutics and Krystal Biotech 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 Krystal Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sarepta Therapeutics and Krystal Biotech.
Diversification Opportunities for Sarepta Therapeutics and Krystal Biotech
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sarepta and Krystal is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Sarepta Therapeutics and Krystal Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Krystal Biotech 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 Krystal Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Krystal Biotech has no effect on the direction of Sarepta Therapeutics i.e., Sarepta Therapeutics and Krystal Biotech go up and down completely randomly.
Pair Corralation between Sarepta Therapeutics and Krystal Biotech
Given the investment horizon of 90 days Sarepta Therapeutics is expected to under-perform the Krystal Biotech. But the stock apears to be less risky and, when comparing its historical volatility, Sarepta Therapeutics is 1.25 times less risky than Krystal Biotech. The stock trades about -0.23 of its potential returns per unit of risk. The Krystal Biotech is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 17,689 in Krystal Biotech on August 28, 2024 and sell it today you would earn a total of 1,767 from holding Krystal Biotech or generate 9.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sarepta Therapeutics vs. Krystal Biotech
Performance |
| Timeline |
| Sarepta Therapeutics |
| Krystal Biotech |
Sarepta Therapeutics and Krystal Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sarepta Therapeutics and Krystal Biotech
The main advantage of trading using opposite Sarepta Therapeutics and Krystal Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sarepta Therapeutics position performs unexpectedly, Krystal Biotech 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 Krystal Biotech will offset losses from the drop in Krystal Biotech's long position.| Sarepta Therapeutics vs. Krystal Biotech | Sarepta Therapeutics vs. PTC Therapeutics | Sarepta Therapeutics vs. Iovance Biotherapeutics | Sarepta Therapeutics vs. Madrigal Pharmaceuticals |
| Krystal Biotech vs. Eliem Therapeutics | Krystal Biotech vs. HCW Biologics | Krystal Biotech vs. Scpharmaceuticals | Krystal Biotech vs. Milestone 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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