Correlation Between Sarepta Therapeutics and Ikena Oncology

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

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

Diversification Opportunities for Sarepta Therapeutics and Ikena Oncology

-0.05

Correlation Coefficient

Sarepta Therapeutics  Ikena Oncology

Good diversification

The 3 months correlation between Sarepta and Ikena is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Sarepta Therapeutics and Ikena Oncology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ikena Oncology 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 Ikena Oncology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ikena Oncology has no effect on the direction of Sarepta Therapeutics i.e., Sarepta Therapeutics and Ikena Oncology go up and down completely randomly.

Pair Corralation between Sarepta Therapeutics and Ikena Oncology

Given the investment horizon of 90 days Sarepta Therapeutics is expected to generate 1.58 times less return on investment than Ikena Oncology. But when comparing it to its historical volatility, Sarepta Therapeutics is 1.52 times less risky than Ikena Oncology. It trades about 0.02 of its potential returns per unit of risk. Ikena Oncology is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  269.00  in Ikena Oncology on September 14, 2024 and sell it today you would lose (103.00) from holding Ikena Oncology or give up 38.29% of portfolio value over 90 days.

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

Sarepta Therapeutics  vs.  Ikena Oncology

Sarepta Therapeutics

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sarepta Therapeutics are ranked lower than 1 (%) 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 recent stock price uproar, may contribute to short-horizon losses for the private investors.

Ikena Oncology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ikena Oncology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Ikena Oncology is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Sarepta Therapeutics and Ikena Oncology

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

The idea behind Sarepta Therapeutics and Ikena Oncology 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.