Correlation Between Repligen and ICU Medical

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

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

Diversification Opportunities for Repligen and ICU Medical

-0.16

Correlation Coefficient

Repligen  ICU Medical

Good diversification

The 3 months correlation between Repligen and ICU is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Repligen and ICU Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ICU Medical 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 ICU Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ICU Medical has no effect on the direction of Repligen i.e., Repligen and ICU Medical go up and down completely randomly.

Pair Corralation between Repligen and ICU Medical

Given the investment horizon of 90 days Repligen is expected to generate 2.28 times more return on investment than ICU Medical. However, Repligen is 2.28 times more volatile than ICU Medical. It trades about 0.12 of its potential returns per unit of risk. ICU Medical is currently generating about -0.22 per unit of risk. If you would invest  13,638  in Repligen on August 31, 2024 and sell it today you would earn a total of  1,361  from holding Repligen or generate 9.98% return on investment over 90 days.

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

Repligen  vs.  ICU Medical

Repligen

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Repligen are ranked lower than 3 (%) 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 December 2024.

ICU Medical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ICU Medical has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, ICU Medical is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Repligen and ICU Medical

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

The idea behind Repligen and ICU Medical 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.