Correlation Between Repligen and STAAR Surgical

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

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

Diversification Opportunities for Repligen and STAAR Surgical

-0.47

Correlation Coefficient

Repligen  STAAR Surgical

Very good diversification

The 3 months correlation between Repligen and STAAR is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Repligen and STAAR Surgical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STAAR Surgical 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 STAAR Surgical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STAAR Surgical has no effect on the direction of Repligen i.e., Repligen and STAAR Surgical go up and down completely randomly.

Pair Corralation between Repligen and STAAR Surgical

Given the investment horizon of 90 days Repligen is expected to generate 0.82 times more return on investment than STAAR Surgical. However, Repligen is 1.22 times less risky than STAAR Surgical. It trades about -0.03 of its potential returns per unit of risk. STAAR Surgical is currently generating about -0.06 per unit of risk. If you would invest  16,092  in Repligen on October 15, 2024 and sell it today you would lose (248.00) from holding Repligen or give up 1.54% of portfolio value over 90 days.

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

Repligen  vs.  STAAR Surgical

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 February 2025.

STAAR Surgical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days STAAR Surgical has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Repligen and STAAR Surgical

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

The idea behind Repligen and STAAR Surgical 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.