Correlation Between Sarepta Therapeutics and Virtus LifeSci
Can any of the company-specific risk be diversified away by investing in both Sarepta Therapeutics and Virtus LifeSci 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 Virtus LifeSci into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sarepta Therapeutics and Virtus LifeSci Biotech, you can compare the effects of market volatilities on Sarepta Therapeutics and Virtus LifeSci 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 Virtus LifeSci. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sarepta Therapeutics and Virtus LifeSci.
Diversification Opportunities for Sarepta Therapeutics and Virtus LifeSci
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sarepta and Virtus is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Sarepta Therapeutics and Virtus LifeSci Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus LifeSci 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 Virtus LifeSci. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus LifeSci Biotech has no effect on the direction of Sarepta Therapeutics i.e., Sarepta Therapeutics and Virtus LifeSci go up and down completely randomly.
Pair Corralation between Sarepta Therapeutics and Virtus LifeSci
Given the investment horizon of 90 days Sarepta Therapeutics is expected to generate 0.71 times more return on investment than Virtus LifeSci. However, Sarepta Therapeutics is 1.42 times less risky than Virtus LifeSci. It trades about -0.31 of its potential returns per unit of risk. Virtus LifeSci Biotech is currently generating about -0.37 per unit of risk. If you would invest 12,608 in Sarepta Therapeutics on January 20, 2024 and sell it today you would lose (953.00) from holding Sarepta Therapeutics or give up 7.56% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 95.45% |
Values | Daily Returns |
Sarepta Therapeutics vs. Virtus LifeSci Biotech
Performance |
Timeline |
Sarepta Therapeutics |
Virtus LifeSci Biotech |
Sarepta Therapeutics and Virtus LifeSci Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sarepta Therapeutics and Virtus LifeSci
The main advantage of trading using opposite Sarepta Therapeutics and Virtus LifeSci positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sarepta Therapeutics position performs unexpectedly, Virtus LifeSci 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 Virtus LifeSci will offset losses from the drop in Virtus LifeSci's long position.Sarepta Therapeutics vs. Krystal Biotech | Sarepta Therapeutics vs. PTC Therapeutics | Sarepta Therapeutics vs. Iovance Biotherapeutics | Sarepta Therapeutics vs. Madrigal Pharmaceuticals |
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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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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