Correlation Between Replimune and Structure Therapeutics

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

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

Diversification Opportunities for Replimune and Structure Therapeutics

-0.35

Correlation Coefficient

Replimune  Structure Therapeutics

Very good diversification

The 3 months correlation between Replimune and Structure is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Replimune Group and Structure Therapeutics America in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Structure Therapeutics 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 Structure Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Structure Therapeutics has no effect on the direction of Replimune i.e., Replimune and Structure Therapeutics go up and down completely randomly.

Pair Corralation between Replimune and Structure Therapeutics

Given the investment horizon of 90 days Replimune Group is expected to generate 1.34 times more return on investment than Structure Therapeutics. However, Replimune is 1.34 times more volatile than Structure Therapeutics American. It trades about 0.08 of its potential returns per unit of risk. Structure Therapeutics American is currently generating about -0.02 per unit of risk. If you would invest  1,053  in Replimune Group on September 7, 2024 and sell it today you would earn a total of  252.00  from holding Replimune Group or generate 23.93% return on investment over 90 days.

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

Replimune Group  vs.  Structure Therapeutics America

Replimune Group

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Replimune Group are ranked lower than 6 (%) 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.

Structure Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Structure Therapeutics American has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental indicators, Structure Therapeutics is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Replimune and Structure Therapeutics

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

The idea behind Replimune Group and Structure Therapeutics American 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.