Correlation Between Repligen and Postal Realty

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

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

Diversification Opportunities for Repligen and Postal Realty

0.31

Correlation Coefficient

Repligen  Postal Realty

Weak diversification

The 3 months correlation between Repligen and Postal is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Repligen and Postal Realty Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Postal Realty Trust 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 Postal Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Postal Realty Trust has no effect on the direction of Repligen i.e., Repligen and Postal Realty go up and down completely randomly.

Pair Corralation between Repligen and Postal Realty

Given the investment horizon of 90 days Repligen is expected to generate 2.91 times more return on investment than Postal Realty. However, Repligen is 2.91 times more volatile than Postal Realty Trust. It trades about 0.04 of its potential returns per unit of risk. Postal Realty Trust is currently generating about 0.01 per unit of risk. If you would invest  14,448  in Repligen on September 4, 2024 and sell it today you would earn a total of  598.00  from holding Repligen or generate 4.14% return on investment over 90 days.

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

Repligen  vs.  Postal Realty Trust

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.

Postal Realty Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Postal Realty Trust has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Postal Realty is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Repligen and Postal Realty

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

The idea behind Repligen and Postal Realty Trust 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.