Correlation Between Sarepta Therapeutics and SAB Biotherapeutics
Can any of the company-specific risk be diversified away by investing in both Sarepta Therapeutics and SAB Biotherapeutics 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 SAB Biotherapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sarepta Therapeutics and SAB Biotherapeutics, you can compare the effects of market volatilities on Sarepta Therapeutics and SAB Biotherapeutics 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 SAB Biotherapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sarepta Therapeutics and SAB Biotherapeutics.
Diversification Opportunities for Sarepta Therapeutics and SAB Biotherapeutics
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sarepta and SAB is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Sarepta Therapeutics and SAB Biotherapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAB Biotherapeutics 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 SAB Biotherapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SAB Biotherapeutics has no effect on the direction of Sarepta Therapeutics i.e., Sarepta Therapeutics and SAB Biotherapeutics go up and down completely randomly.
Pair Corralation between Sarepta Therapeutics and SAB Biotherapeutics
Given the investment horizon of 90 days Sarepta Therapeutics is expected to generate 0.28 times more return on investment than SAB Biotherapeutics. However, Sarepta Therapeutics is 3.53 times less risky than SAB Biotherapeutics. It trades about -0.03 of its potential returns per unit of risk. SAB Biotherapeutics is currently generating about -0.05 per unit of risk. If you would invest 11,947 in Sarepta Therapeutics on October 20, 2024 and sell it today you would lose (147.00) from holding Sarepta Therapeutics or give up 1.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sarepta Therapeutics vs. SAB Biotherapeutics
Performance |
| Timeline |
| Sarepta Therapeutics |
| SAB Biotherapeutics |
Sarepta Therapeutics and SAB Biotherapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sarepta Therapeutics and SAB Biotherapeutics
The main advantage of trading using opposite Sarepta Therapeutics and SAB Biotherapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sarepta Therapeutics position performs unexpectedly, SAB Biotherapeutics 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 SAB Biotherapeutics will offset losses from the drop in SAB Biotherapeutics' long position.| Sarepta Therapeutics vs. Krystal Biotech | Sarepta Therapeutics vs. PTC Therapeutics | Sarepta Therapeutics vs. Iovance Biotherapeutics | Sarepta Therapeutics vs. Madrigal Pharmaceuticals |
| SAB Biotherapeutics vs. Processa Pharmaceuticals | SAB Biotherapeutics vs. Third Harmonic Bio | SAB Biotherapeutics vs. Cingulate Warrants | SAB Biotherapeutics vs. Anebulo 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.
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