Correlation Between Replimune and Assembly Biosciences

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

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

Diversification Opportunities for Replimune and Assembly Biosciences

0.17

Correlation Coefficient

Replimune  Assembly Biosciences

Average diversification

The 3 months correlation between Replimune and Assembly is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Replimune Group and Assembly Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Assembly Biosciences 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 Assembly Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Assembly Biosciences has no effect on the direction of Replimune i.e., Replimune and Assembly Biosciences go up and down completely randomly.

Pair Corralation between Replimune and Assembly Biosciences

Given the investment horizon of 90 days Replimune Group is expected to generate 1.16 times more return on investment than Assembly Biosciences. However, Replimune is 1.16 times more volatile than Assembly Biosciences. It trades about -0.05 of its potential returns per unit of risk. Assembly Biosciences is currently generating about -0.18 per unit of risk. 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	Insignificant
Accuracy	100.0%
Values	Daily Returns

Replimune Group  vs.  Assembly Biosciences

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.

Assembly Biosciences

Risk-Adjusted Performance

Very Weak

Over the last 90 days Assembly Biosciences has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's primary indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Replimune and Assembly Biosciences

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

The idea behind Replimune Group and Assembly Biosciences 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.