Correlation Between Arcellx and Replimune

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Can any of the company-specific risk be diversified away by investing in both Arcellx and Replimune 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 Arcellx and Replimune into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arcellx and Replimune Group, you can compare the effects of market volatilities on Arcellx and Replimune 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 Arcellx with a short position of Replimune. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arcellx and Replimune.

Diversification Opportunities for Arcellx and Replimune

0.47
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Arcellx and Replimune is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Arcellx and Replimune Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Replimune Group and Arcellx 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 Arcellx are associated (or correlated) with Replimune. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Replimune Group has no effect on the direction of Arcellx i.e., Arcellx and Replimune go up and down completely randomly.

Pair Corralation between Arcellx and Replimune

Given the investment horizon of 90 days Arcellx is expected to generate 1.28 times less return on investment than Replimune. But when comparing it to its historical volatility, Arcellx is 1.69 times less risky than Replimune. It trades about 0.12 of its potential returns per unit of risk. Replimune Group is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  1,037  in Replimune Group on September 6, 2024 and sell it today you would earn a total of  280.00  from holding Replimune Group or generate 27.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy98.44%
ValuesDaily Returns

Arcellx  vs.  Replimune Group

 Performance 
       Timeline  
Arcellx 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Arcellx are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting essential indicators, Arcellx showed solid returns over the last few months and may actually be approaching a breakup point.
Replimune Group 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Replimune Group are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Replimune disclosed solid returns over the last few months and may actually be approaching a breakup point.

Arcellx and Replimune Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Arcellx and Replimune

The main advantage of trading using opposite Arcellx and Replimune positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arcellx position performs unexpectedly, Replimune 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 Replimune will offset losses from the drop in Replimune's long position.
The idea behind Arcellx and Replimune Group 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.
Check out your portfolio center.
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.

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