Correlation Between Larimar Therapeutics and Replimune

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

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

Diversification Opportunities for Larimar Therapeutics and Replimune

0.43

Correlation Coefficient

Larimar Therapeutics  Replimune

Very weak diversification

The 3 months correlation between Larimar and Replimune is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Larimar Therapeutics and Replimune Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Replimune Group and Larimar 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 Larimar Therapeutics 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 Larimar Therapeutics i.e., Larimar Therapeutics and Replimune go up and down completely randomly.

Pair Corralation between Larimar Therapeutics and Replimune

Given the investment horizon of 90 days Larimar Therapeutics is expected to under-perform the Replimune. In addition to that, Larimar Therapeutics is 1.2 times more volatile than Replimune Group. It trades about -0.15 of its total potential returns per unit of risk. Replimune Group is currently generating about -0.05 per unit of volatility. If you would invest  1,233  in Replimune Group on December 30, 2024 and sell it today you would lose (194.00) from holding Replimune Group or give up 15.73% of portfolio value over 90 days.

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

Larimar Therapeutics  vs.  Replimune Group

Larimar Therapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Larimar Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's primary indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail 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 conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Larimar Therapeutics and Replimune

The main advantage of trading using opposite Larimar Therapeutics and Replimune positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Larimar 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 Larimar Therapeutics 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 CEOs Directory module to screen CEOs from public companies around the world.