Correlation Between Repligen and Noble Plc

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

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

Diversification Opportunities for Repligen and Noble Plc

0.16

Correlation Coefficient

Repligen  Noble Plc

Average diversification

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

Pair Corralation between Repligen and Noble Plc

Given the investment horizon of 90 days Repligen is expected to generate 1.38 times more return on investment than Noble Plc. However, Repligen is 1.38 times more volatile than Noble plc. It trades about 0.0 of its potential returns per unit of risk. Noble plc is currently generating about -0.03 per unit of risk. If you would invest  16,074  in Repligen on September 4, 2024 and sell it today you would lose (1,224) from holding Repligen or give up 7.61% of portfolio value over 90 days.

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

Repligen  vs.  Noble plc

Repligen

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Repligen are ranked lower than 2 (%) 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 January 2025.

Noble plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Noble plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Noble Plc is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Repligen and Noble Plc

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

The idea behind Repligen and Noble 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.