Correlation Between Protagonist Therapeutics and Replimune

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

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

Diversification Opportunities for Protagonist Therapeutics and Replimune

0.37

Correlation Coefficient

Protagonist Therapeutics  Replimune

Weak diversification

The 3 months correlation between Protagonist and Replimune is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Protagonist Therapeutics and Replimune Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Replimune Group and Protagonist 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 Protagonist 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 Protagonist Therapeutics i.e., Protagonist Therapeutics and Replimune go up and down completely randomly.

Pair Corralation between Protagonist Therapeutics and Replimune

Given the investment horizon of 90 days Protagonist Therapeutics is expected to generate 5.87 times less return on investment than Replimune. But when comparing it to its historical volatility, Protagonist Therapeutics is 2.05 times less risky than Replimune. It trades about 0.04 of its potential returns per unit of risk. Replimune Group is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  1,017  in Replimune Group on August 30, 2024 and sell it today you would earn a total of  388.00  from holding Replimune Group or generate 38.15% return on investment over 90 days.

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

Protagonist Therapeutics  vs.  Replimune Group

Protagonist Therapeutics

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Protagonist Therapeutics are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady technical and fundamental indicators, Protagonist Therapeutics may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Replimune Group

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Replimune Group are ranked lower than 8 (%) 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 Protagonist Therapeutics and Replimune

The main advantage of trading using opposite Protagonist Therapeutics and Replimune positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Protagonist 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 Protagonist 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.