Correlation Between Replimune and Arcellx

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

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

Diversification Opportunities for Replimune and Arcellx

0.44

Correlation Coefficient

Replimune  Arcellx

Very weak diversification

The 3 months correlation between Replimune and Arcellx is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Replimune Group and Arcellx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arcellx and Replimune 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 Replimune Group are associated (or correlated) with Arcellx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arcellx has no effect on the direction of Replimune i.e., Replimune and Arcellx go up and down completely randomly.

Pair Corralation between Replimune and Arcellx

Given the investment horizon of 90 days Replimune Group is expected to generate 1.7 times more return on investment than Arcellx. However, Replimune is 1.7 times more volatile than Arcellx. It trades about 0.09 of its potential returns per unit of risk. Arcellx is currently generating about 0.08 per unit of risk. If you would invest  1,034  in Replimune Group on September 10, 2024 and sell it today you would earn a total of  274.00  from holding Replimune Group or generate 26.5% return on investment over 90 days.

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

Replimune Group  vs.  Arcellx

Replimune Group

Risk-Adjusted Performance

7 of 100

Modest

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.

Arcellx

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Arcellx are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting essential indicators, Arcellx showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Replimune and Arcellx

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

The idea behind Replimune Group and Arcellx 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.

Check out your portfolio center.

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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.