Correlation Between Centessa Pharmaceuticals and Replimune

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

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

Diversification Opportunities for Centessa Pharmaceuticals and Replimune

0.42

Correlation Coefficient

Centessa Pharmaceuticals  Replimune

Very weak diversification

The 3 months correlation between Centessa and Replimune is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Centessa Pharmaceuticals PLC and Replimune Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Replimune Group and Centessa Pharmaceuticals 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 Centessa Pharmaceuticals PLC 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 Centessa Pharmaceuticals i.e., Centessa Pharmaceuticals and Replimune go up and down completely randomly.

Pair Corralation between Centessa Pharmaceuticals and Replimune

Given the investment horizon of 90 days Centessa Pharmaceuticals PLC is expected to generate 0.92 times more return on investment than Replimune. However, Centessa Pharmaceuticals PLC is 1.08 times less risky than Replimune. It trades about 0.09 of its potential returns per unit of risk. Replimune Group is currently generating about 0.01 per unit of risk. If you would invest  363.00  in Centessa Pharmaceuticals PLC on November 29, 2024 and sell it today you would earn a total of  1,212  from holding Centessa Pharmaceuticals PLC or generate 333.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.8%
Values	Daily Returns

Centessa Pharmaceuticals PLC  vs.  Replimune Group

Centessa Pharmaceuticals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Centessa Pharmaceuticals PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Replimune Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Replimune Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Replimune is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Centessa Pharmaceuticals and Replimune

The main advantage of trading using opposite Centessa Pharmaceuticals and Replimune positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centessa Pharmaceuticals 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 Centessa Pharmaceuticals PLC 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.

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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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.