Correlation Between Structure Therapeutics and Replimune

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

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

Diversification Opportunities for Structure Therapeutics and Replimune

-0.32

Correlation Coefficient

Structure Therapeutics  Replimune

Very good diversification

The 3 months correlation between Structure and Replimune is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Structure Therapeutics America and Replimune Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Replimune Group and Structure 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 Structure Therapeutics American 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 Structure Therapeutics i.e., Structure Therapeutics and Replimune go up and down completely randomly.

Pair Corralation between Structure Therapeutics and Replimune

Given the investment horizon of 90 days Structure Therapeutics American is expected to generate 1.36 times more return on investment than Replimune. However, Structure Therapeutics is 1.36 times more volatile than Replimune Group. It trades about 0.05 of its potential returns per unit of risk. Replimune Group is currently generating about 0.0 per unit of risk. If you would invest  1,500  in Structure Therapeutics American on September 6, 2024 and sell it today you would earn a total of  1,624  from holding Structure Therapeutics American or generate 108.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	93.74%
Values	Daily Returns

Structure Therapeutics America  vs.  Replimune Group

Structure Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Structure Therapeutics American has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental indicators, Structure Therapeutics is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Replimune Group

Risk-Adjusted Performance

7 of 100

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.

Pair Trading with Structure Therapeutics and Replimune

The main advantage of trading using opposite Structure Therapeutics and Replimune positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Structure Therapeutics 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 Structure Therapeutics American 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.