Correlation Between Sarepta Therapeutics and Travere Therapeutics
Can any of the company-specific risk be diversified away by investing in both Sarepta Therapeutics and Travere 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 Travere 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 Travere Therapeutics, you can compare the effects of market volatilities on Sarepta Therapeutics and Travere 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 Travere Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sarepta Therapeutics and Travere Therapeutics.
Diversification Opportunities for Sarepta Therapeutics and Travere Therapeutics
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sarepta and Travere is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Sarepta Therapeutics and Travere Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Travere 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 Travere Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Travere Therapeutics has no effect on the direction of Sarepta Therapeutics i.e., Sarepta Therapeutics and Travere Therapeutics go up and down completely randomly.
Pair Corralation between Sarepta Therapeutics and Travere Therapeutics
Given the investment horizon of 90 days Sarepta Therapeutics is expected to generate 1.16 times more return on investment than Travere Therapeutics. However, Sarepta Therapeutics is 1.16 times more volatile than Travere Therapeutics. It trades about 0.1 of its potential returns per unit of risk. Travere Therapeutics is currently generating about 0.08 per unit of risk. If you would invest 12,778 in Sarepta Therapeutics on August 31, 2024 and sell it today you would earn a total of 1,016 from holding Sarepta Therapeutics or generate 7.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sarepta Therapeutics vs. Travere Therapeutics
Performance |
| Timeline |
| Sarepta Therapeutics |
| Travere Therapeutics |
Sarepta Therapeutics and Travere Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sarepta Therapeutics and Travere Therapeutics
The main advantage of trading using opposite Sarepta Therapeutics and Travere Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sarepta Therapeutics position performs unexpectedly, Travere 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 Travere Therapeutics will offset losses from the drop in Travere Therapeutics' long position.| Sarepta Therapeutics vs. Krystal Biotech | Sarepta Therapeutics vs. PTC Therapeutics | Sarepta Therapeutics vs. Iovance Biotherapeutics | Sarepta Therapeutics vs. Madrigal Pharmaceuticals |
| Travere Therapeutics vs. Cytokinetics | Travere Therapeutics vs. Ventyx Biosciences | Travere Therapeutics vs. Cogent Biosciences | Travere Therapeutics vs. Nuvalent |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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