Correlation Between Sarepta Therapeutics and I Mab

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

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

Diversification Opportunities for Sarepta Therapeutics and I Mab

0.22

Correlation Coefficient

Sarepta Therapeutics  I Mab

Modest diversification

The 3 months correlation between Sarepta and IMAB is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Sarepta Therapeutics and I Mab in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on I Mab 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 I Mab. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of I Mab has no effect on the direction of Sarepta Therapeutics i.e., Sarepta Therapeutics and I Mab go up and down completely randomly.

Pair Corralation between Sarepta Therapeutics and I Mab

Given the investment horizon of 90 days Sarepta Therapeutics is expected to under-perform the I Mab. But the stock apears to be less risky and, when comparing its historical volatility, Sarepta Therapeutics is 1.31 times less risky than I Mab. The stock trades about -0.2 of its potential returns per unit of risk. The I Mab is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  95.00  in I Mab on December 4, 2024 and sell it today you would lose (4.08) from holding I Mab or give up 4.29% of portfolio value over 90 days.

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

Sarepta Therapeutics  vs.  I Mab

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.

I Mab

Risk-Adjusted Performance

Very Weak

Over the last 90 days I Mab has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Sarepta Therapeutics and I Mab

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

The idea behind Sarepta Therapeutics and I Mab 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.