Correlation Between SpringWorks Therapeutics and PTC Therapeutics

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

By analyzing existing cross correlation between SpringWorks Therapeutics and PTC Therapeutics, you can compare the effects of market volatilities on SpringWorks Therapeutics and PTC 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 SpringWorks Therapeutics with a short position of PTC Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of SpringWorks Therapeutics and PTC Therapeutics.

Diversification Opportunities for SpringWorks Therapeutics and PTC Therapeutics

0.12

Correlation Coefficient

SpringWorks Therapeutics  PTC Therapeutics

Average diversification

The 3 months correlation between SpringWorks and PTC is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding SpringWorks Therapeutics and PTC Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PTC Therapeutics and SpringWorks 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 SpringWorks Therapeutics are associated (or correlated) with PTC Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PTC Therapeutics has no effect on the direction of SpringWorks Therapeutics i.e., SpringWorks Therapeutics and PTC Therapeutics go up and down completely randomly.

Pair Corralation between SpringWorks Therapeutics and PTC Therapeutics

Given the investment horizon of 90 days SpringWorks Therapeutics is expected to generate 1.87 times less return on investment than PTC Therapeutics. But when comparing it to its historical volatility, SpringWorks Therapeutics is 16.98 times less risky than PTC Therapeutics. It trades about 0.37 of its potential returns per unit of risk. PTC Therapeutics is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  4,601  in PTC Therapeutics on May 16, 2025 and sell it today you would earn a total of  216.00  from holding PTC Therapeutics or generate 4.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	50.82%
Values	Daily Returns

SpringWorks Therapeutics  vs.  PTC Therapeutics

SpringWorks Therapeutics

Risk-Adjusted Performance

Strong

Over the last 90 days SpringWorks Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, SpringWorks Therapeutics is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

PTC Therapeutics

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in PTC Therapeutics are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain fundamental indicators, PTC Therapeutics may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with SpringWorks Therapeutics and PTC Therapeutics

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

The idea behind SpringWorks Therapeutics and PTC 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.