Correlation Between Novocure and Repligen

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

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

Diversification Opportunities for Novocure and Repligen

-0.12

Correlation Coefficient

Novocure  Repligen

Good diversification

The 3 months correlation between Novocure and Repligen is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Novocure and Repligen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Repligen and Novocure 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 Novocure 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 Novocure i.e., Novocure and Repligen go up and down completely randomly.

Pair Corralation between Novocure and Repligen

Given the investment horizon of 90 days Novocure is expected to under-perform the Repligen. In addition to that, Novocure is 1.27 times more volatile than Repligen. It trades about -0.33 of its total potential returns per unit of risk. Repligen is currently generating about -0.04 per unit of volatility. If you would invest  15,987  in Repligen on December 4, 2024 and sell it today you would lose (449.00) from holding Repligen or give up 2.81% of portfolio value over 90 days.

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

Novocure  vs.  Repligen

Novocure

Risk-Adjusted Performance

Very Weak

Over the last 90 days Novocure 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 fundamental 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.

Repligen

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Repligen are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile technical and fundamental indicators, Repligen may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Novocure and Repligen

The main advantage of trading using opposite Novocure and Repligen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Novocure 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 Novocure 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 Stocks Directory module to find actively traded stocks across global markets.