Correlation Between Viking Therapeutics and Sarepta Therapeutics
Can any of the company-specific risk be diversified away by investing in both Viking Therapeutics 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 Viking Therapeutics and Sarepta Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Viking Therapeutics and Sarepta Therapeutics, you can compare the effects of market volatilities on Viking Therapeutics 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 Viking Therapeutics with a short position of Sarepta Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Viking Therapeutics and Sarepta Therapeutics.
Diversification Opportunities for Viking Therapeutics and Sarepta Therapeutics
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Viking and Sarepta is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Viking Therapeutics and Sarepta Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sarepta Therapeutics and Viking 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 Viking Therapeutics 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 Viking Therapeutics i.e., Viking Therapeutics and Sarepta Therapeutics go up and down completely randomly.
Pair Corralation between Viking Therapeutics and Sarepta Therapeutics
Given the investment horizon of 90 days Viking Therapeutics is expected to generate 2.75 times more return on investment than Sarepta Therapeutics. However, Viking Therapeutics is 2.75 times more volatile than Sarepta Therapeutics. It trades about -0.07 of its potential returns per unit of risk. Sarepta Therapeutics is currently generating about -0.22 per unit of risk. If you would invest 6,039 in Viking Therapeutics on August 24, 2024 and sell it today you would lose (876.00) from holding Viking Therapeutics or give up 14.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Viking Therapeutics vs. Sarepta Therapeutics
Performance |
| Timeline |
| Viking Therapeutics |
| Sarepta Therapeutics |
Viking Therapeutics and Sarepta Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Viking Therapeutics and Sarepta Therapeutics
The main advantage of trading using opposite Viking Therapeutics and Sarepta Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Viking Therapeutics 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.| Viking Therapeutics vs. Terns Pharmaceuticals | Viking Therapeutics vs. Akero Therapeutics | Viking Therapeutics vs. Madrigal Pharmaceuticals | Viking Therapeutics vs. Sarepta Therapeutics |
| 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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