Correlation Between Replimune and Cullinan Oncology

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Can any of the company-specific risk be diversified away by investing in both Replimune and Cullinan Oncology 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 Cullinan Oncology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Replimune Group and Cullinan Oncology LLC, you can compare the effects of market volatilities on Replimune and Cullinan Oncology 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 Cullinan Oncology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Replimune and Cullinan Oncology.

Diversification Opportunities for Replimune and Cullinan Oncology

-0.63
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Replimune and Cullinan is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Replimune Group and Cullinan Oncology LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cullinan Oncology LLC 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 Cullinan Oncology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cullinan Oncology LLC has no effect on the direction of Replimune i.e., Replimune and Cullinan Oncology go up and down completely randomly.

Pair Corralation between Replimune and Cullinan Oncology

Given the investment horizon of 90 days Replimune Group is expected to generate 1.58 times more return on investment than Cullinan Oncology. However, Replimune is 1.58 times more volatile than Cullinan Oncology LLC. It trades about 0.09 of its potential returns per unit of risk. Cullinan Oncology LLC is currently generating about -0.13 per unit of risk. If you would invest  1,037  in Replimune Group on September 6, 2024 and sell it today you would earn a total of  280.00  from holding Replimune Group or generate 27.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy98.44%
ValuesDaily Returns

Replimune Group  vs.  Cullinan Oncology LLC

 Performance 
       Timeline  
Replimune Group 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
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.
Cullinan Oncology LLC 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Cullinan Oncology LLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Replimune and Cullinan Oncology Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Replimune and Cullinan Oncology

The main advantage of trading using opposite Replimune and Cullinan Oncology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Replimune position performs unexpectedly, Cullinan Oncology 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 Cullinan Oncology will offset losses from the drop in Cullinan Oncology's long position.
The idea behind Replimune Group and Cullinan Oncology LLC 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.

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