Correlation Between Sarepta Therapeutics and Rezolute

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

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

Diversification Opportunities for Sarepta Therapeutics and Rezolute

0.11

Correlation Coefficient

Sarepta Therapeutics  Rezolute

Average diversification

The 3 months correlation between Sarepta and Rezolute is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Sarepta Therapeutics and Rezolute in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rezolute 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 Rezolute. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rezolute has no effect on the direction of Sarepta Therapeutics i.e., Sarepta Therapeutics and Rezolute go up and down completely randomly.

Pair Corralation between Sarepta Therapeutics and Rezolute

Given the investment horizon of 90 days Sarepta Therapeutics is expected to under-perform the Rezolute. But the stock apears to be less risky and, when comparing its historical volatility, Sarepta Therapeutics is 1.35 times less risky than Rezolute. The stock trades about -0.03 of its potential returns per unit of risk. The Rezolute is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  489.00  in Rezolute on October 20, 2024 and sell it today you would lose (2.00) from holding Rezolute or give up 0.41% 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.  Rezolute

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 comparatively stable basic indicators, Sarepta Therapeutics is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Rezolute

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Rezolute are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable essential indicators, Rezolute is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Sarepta Therapeutics and Rezolute

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

The idea behind Sarepta Therapeutics and Rezolute 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.