Correlation Between Sarepta Therapeutics and Apellis Pharmaceuticals

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

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

Diversification Opportunities for Sarepta Therapeutics and Apellis Pharmaceuticals

0.68

Correlation Coefficient

Sarepta Therapeutics  Apellis Pharmaceuticals

Poor diversification

The 3 months correlation between Sarepta and Apellis is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Sarepta Therapeutics and Apellis Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apellis Pharmaceuticals 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 Apellis Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apellis Pharmaceuticals has no effect on the direction of Sarepta Therapeutics i.e., Sarepta Therapeutics and Apellis Pharmaceuticals go up and down completely randomly.

Pair Corralation between Sarepta Therapeutics and Apellis Pharmaceuticals

Given the investment horizon of 90 days Sarepta Therapeutics is expected to under-perform the Apellis Pharmaceuticals. But the stock apears to be less risky and, when comparing its historical volatility, Sarepta Therapeutics is 1.07 times less risky than Apellis Pharmaceuticals. The stock trades about -0.18 of its potential returns per unit of risk. The Apellis Pharmaceuticals is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  2,738  in Apellis Pharmaceuticals on August 15, 2024 and sell it today you would earn a total of  188.00  from holding Apellis Pharmaceuticals or generate 6.87% return on investment over 90 days.

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

Sarepta Therapeutics  vs.  Apellis Pharmaceuticals

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 weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in December 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Apellis Pharmaceuticals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Apellis Pharmaceuticals 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 essential indicators remain comparatively stable which may send shares a bit higher in December 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Sarepta Therapeutics and Apellis Pharmaceuticals

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

The idea behind Sarepta Therapeutics and Apellis Pharmaceuticals 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.