Correlation Between Sarepta Therapeutics and National American

Can any of the company-specific risk be diversified away by investing in both Sarepta Therapeutics and National American 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 National American into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Sarepta Therapeutics and National American University, you can compare the effects of market volatilities on Sarepta Therapeutics and National American 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 National American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sarepta Therapeutics and National American.

Diversification Opportunities for Sarepta Therapeutics and National American

0.38

Correlation Coefficient

Sarepta Therapeutics  National American

Weak diversification

The 3 months correlation between Sarepta and National is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Sarepta Therapeutics and National American University in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National American 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 National American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National American has no effect on the direction of Sarepta Therapeutics i.e., Sarepta Therapeutics and National American go up and down completely randomly.

Pair Corralation between Sarepta Therapeutics and National American

If you would invest  9.11  in National American University on February 1, 2024 and sell it today you would earn a total of  0.00  from holding National American University or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	4.55%
Values	Daily Returns

Sarepta Therapeutics  vs.  National American University

Sarepta Therapeutics

Risk-Adjusted Performance

2 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Sarepta Therapeutics are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Sarepta Therapeutics is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

National American

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days National American University has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, National American is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Sarepta Therapeutics and National American

The main advantage of trading using opposite Sarepta Therapeutics and National American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sarepta Therapeutics position performs unexpectedly, National American 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 National American will offset losses from the drop in National American's long position.

The idea behind Sarepta Therapeutics and National American University pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Correlations module to find global opportunities by holding instruments from different markets.