Correlation Between Repligen and Centessa Pharmaceuticals

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

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

Diversification Opportunities for Repligen and Centessa Pharmaceuticals

-0.09

Correlation Coefficient

Repligen  Centessa Pharmaceuticals

Good diversification

The 3 months correlation between Repligen and Centessa is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Repligen and Centessa Pharmaceuticals PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centessa Pharmaceuticals and Repligen 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 Repligen are associated (or correlated) with Centessa Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centessa Pharmaceuticals has no effect on the direction of Repligen i.e., Repligen and Centessa Pharmaceuticals go up and down completely randomly.

Pair Corralation between Repligen and Centessa Pharmaceuticals

Given the investment horizon of 90 days Repligen is expected to generate 0.84 times more return on investment than Centessa Pharmaceuticals. However, Repligen is 1.19 times less risky than Centessa Pharmaceuticals. It trades about -0.02 of its potential returns per unit of risk. Centessa Pharmaceuticals PLC is currently generating about -0.03 per unit of risk. If you would invest  14,381  in Repligen on December 29, 2024 and sell it today you would lose (1,040) from holding Repligen or give up 7.23% of portfolio value over 90 days.

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

Repligen  vs.  Centessa Pharmaceuticals PLC

Repligen

Risk-Adjusted Performance

Very Weak

Over the last 90 days Repligen has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Repligen is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Centessa Pharmaceuticals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Centessa Pharmaceuticals PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Repligen and Centessa Pharmaceuticals

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

The idea behind Repligen and Centessa Pharmaceuticals PLC 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.