Correlation Between Repligen and Dragoneer Growth

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

By analyzing existing cross correlation between Repligen and Dragoneer Growth Opportunities, you can compare the effects of market volatilities on Repligen and Dragoneer Growth 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 Dragoneer Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Repligen and Dragoneer Growth.

Diversification Opportunities for Repligen and Dragoneer Growth

0.41

Correlation Coefficient

Repligen  Dragoneer Growth

Very weak diversification

The 3 months correlation between Repligen and Dragoneer is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Repligen and Dragoneer Growth Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dragoneer Growth Opp 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 Dragoneer Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dragoneer Growth Opp has no effect on the direction of Repligen i.e., Repligen and Dragoneer Growth go up and down completely randomly.

Pair Corralation between Repligen and Dragoneer Growth

Given the investment horizon of 90 days Repligen is expected to generate 1.22 times less return on investment than Dragoneer Growth. In addition to that, Repligen is 18.48 times more volatile than Dragoneer Growth Opportunities. It trades about 0.01 of its total potential returns per unit of risk. Dragoneer Growth Opportunities is currently generating about 0.16 per unit of volatility. If you would invest  989.00  in Dragoneer Growth Opportunities on October 21, 2024 and sell it today you would earn a total of  10.00  from holding Dragoneer Growth Opportunities or generate 1.01% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	8.06%
Values	Daily Returns

Repligen  vs.  Dragoneer Growth Opportunities

Repligen

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Repligen are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile technical and fundamental indicators, Repligen may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Dragoneer Growth Opp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dragoneer Growth Opportunities has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Dragoneer Growth is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Repligen and Dragoneer Growth

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

The idea behind Repligen and Dragoneer Growth Opportunities 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.