Correlation Between Alpha Tau and Repligen

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

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

Diversification Opportunities for Alpha Tau and Repligen

0.74

Correlation Coefficient

Alpha Tau  Repligen

Poor diversification

The 3 months correlation between Alpha and Repligen is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Alpha Tau Medical and Repligen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Repligen and Alpha Tau 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 Alpha Tau Medical are associated (or correlated) with Repligen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Repligen has no effect on the direction of Alpha Tau i.e., Alpha Tau and Repligen go up and down completely randomly.

Pair Corralation between Alpha Tau and Repligen

Given the investment horizon of 90 days Alpha Tau Medical is expected to generate 2.87 times more return on investment than Repligen. However, Alpha Tau is 2.87 times more volatile than Repligen. It trades about 0.29 of its potential returns per unit of risk. Repligen is currently generating about 0.32 per unit of risk. If you would invest  308.00  in Alpha Tau Medical on October 23, 2024 and sell it today you would earn a total of  83.00  from holding Alpha Tau Medical or generate 26.95% return on investment over 90 days.

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

Alpha Tau Medical  vs.  Repligen

Alpha Tau Medical

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Alpha Tau Medical are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Alpha Tau unveiled solid returns over the last few months and may actually be approaching a breakup point.

Repligen

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Repligen are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile technical and fundamental indicators, Repligen displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Alpha Tau and Repligen

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

The idea behind Alpha Tau Medical and Repligen 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.