Correlation Between Sarepta Therapeutics and Propanc Biopharma

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

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

Diversification Opportunities for Sarepta Therapeutics and Propanc Biopharma

0.01

Correlation Coefficient

Sarepta Therapeutics  Propanc Biopharma

Significant diversification

The 3 months correlation between Sarepta and Propanc is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Sarepta Therapeutics and Propanc Biopharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Propanc Biopharma 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 Propanc Biopharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Propanc Biopharma has no effect on the direction of Sarepta Therapeutics i.e., Sarepta Therapeutics and Propanc Biopharma go up and down completely randomly.

Pair Corralation between Sarepta Therapeutics and Propanc Biopharma

Given the investment horizon of 90 days Sarepta Therapeutics is expected to generate 0.1 times more return on investment than Propanc Biopharma. However, Sarepta Therapeutics is 10.33 times less risky than Propanc Biopharma. It trades about -0.09 of its potential returns per unit of risk. Propanc Biopharma is currently generating about -0.02 per unit of risk. If you would invest  13,750  in Sarepta Therapeutics on February 28, 2024 and sell it today you would lose (1,404) from holding Sarepta Therapeutics or give up 10.21% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Sarepta Therapeutics  vs.  Propanc Biopharma

Sarepta Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sarepta Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Propanc Biopharma

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Propanc Biopharma has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's fundamental indicators remain somewhat strong which may send shares a bit higher in June 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Sarepta Therapeutics and Propanc Biopharma

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

The idea behind Sarepta Therapeutics and Propanc Biopharma 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.