Correlation Between Sarepta Therapeutics and Cingulate Warrants

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

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

Diversification Opportunities for Sarepta Therapeutics and Cingulate Warrants

0.55

Correlation Coefficient

Sarepta Therapeutics  Cingulate Warrants

Very weak diversification

The 3 months correlation between Sarepta and Cingulate is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Sarepta Therapeutics and Cingulate Warrants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cingulate Warrants 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 Cingulate Warrants. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cingulate Warrants has no effect on the direction of Sarepta Therapeutics i.e., Sarepta Therapeutics and Cingulate Warrants go up and down completely randomly.

Pair Corralation between Sarepta Therapeutics and Cingulate Warrants

Given the investment horizon of 90 days Sarepta Therapeutics is expected to under-perform the Cingulate Warrants. But the stock apears to be less risky and, when comparing its historical volatility, Sarepta Therapeutics is 4.37 times less risky than Cingulate Warrants. The stock trades about -0.17 of its potential returns per unit of risk. The Cingulate Warrants is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  6.12  in Cingulate Warrants on December 27, 2024 and sell it today you would lose (0.22) from holding Cingulate Warrants or give up 3.59% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.36%
Values	Daily Returns

Sarepta Therapeutics  vs.  Cingulate Warrants

Sarepta Therapeutics

Risk-Adjusted Performance

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 weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Cingulate Warrants

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Cingulate Warrants are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile technical and fundamental indicators, Cingulate Warrants showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sarepta Therapeutics and Cingulate Warrants

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

The idea behind Sarepta Therapeutics and Cingulate Warrants 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 Anywhere module to track or share privately all of your investments from the convenience of any device.