Correlation Between Sarepta Therapeutics and Monopar Therapeutics

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

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

Diversification Opportunities for Sarepta Therapeutics and Monopar Therapeutics

-0.67

Correlation Coefficient

Sarepta Therapeutics  Monopar Therapeutics

Excellent diversification

The 3 months correlation between Sarepta and Monopar is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Sarepta Therapeutics and Monopar Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Monopar Therapeutics 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 Monopar Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Monopar Therapeutics has no effect on the direction of Sarepta Therapeutics i.e., Sarepta Therapeutics and Monopar Therapeutics go up and down completely randomly.

Pair Corralation between Sarepta Therapeutics and Monopar Therapeutics

Given the investment horizon of 90 days Sarepta Therapeutics is expected to generate 0.34 times more return on investment than Monopar Therapeutics. However, Sarepta Therapeutics is 2.98 times less risky than Monopar Therapeutics. It trades about -0.2 of its potential returns per unit of risk. Monopar Therapeutics is currently generating about -0.19 per unit of risk. If you would invest  11,381  in Sarepta Therapeutics on December 4, 2024 and sell it today you would lose (1,217) from holding Sarepta Therapeutics or give up 10.69% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

Sarepta Therapeutics  vs.  Monopar Therapeutics

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.

Monopar Therapeutics

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Monopar Therapeutics are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Monopar Therapeutics reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sarepta Therapeutics and Monopar Therapeutics

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

The idea behind Sarepta Therapeutics and Monopar Therapeutics 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.