Correlation Between Repligen and ONCOR

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

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

Diversification Opportunities for Repligen and ONCOR

-0.39

Correlation Coefficient

Repligen  ONCOR

Very good diversification

The 3 months correlation between Repligen and ONCOR is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Repligen and ONCOR ELEC DELIVERY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ONCOR ELEC DELIVERY 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 ONCOR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ONCOR ELEC DELIVERY has no effect on the direction of Repligen i.e., Repligen and ONCOR go up and down completely randomly.

Pair Corralation between Repligen and ONCOR

Given the investment horizon of 90 days Repligen is expected to generate 4.22 times more return on investment than ONCOR. However, Repligen is 4.22 times more volatile than ONCOR ELEC DELIVERY. It trades about 0.04 of its potential returns per unit of risk. ONCOR ELEC DELIVERY is currently generating about -0.04 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 Against
Strength	Insignificant
Accuracy	64.06%
Values	Daily Returns

Repligen  vs.  ONCOR ELEC DELIVERY

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.

ONCOR ELEC DELIVERY

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ONCOR ELEC DELIVERY has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, ONCOR is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Repligen and ONCOR

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

The idea behind Repligen and ONCOR ELEC DELIVERY 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.