Correlation Between Replimune and Compass Therapeutics
Can any of the company-specific risk be diversified away by investing in both Replimune and Compass Therapeutics 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 Replimune and Compass Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Replimune Group and Compass Therapeutics, you can compare the effects of market volatilities on Replimune and Compass Therapeutics 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 Replimune with a short position of Compass Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Replimune and Compass Therapeutics.
Diversification Opportunities for Replimune and Compass Therapeutics
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Replimune and Compass is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Replimune Group and Compass Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compass Therapeutics and Replimune 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 Replimune Group are associated (or correlated) with Compass Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compass Therapeutics has no effect on the direction of Replimune i.e., Replimune and Compass Therapeutics go up and down completely randomly.
Pair Corralation between Replimune and Compass Therapeutics
Given the investment horizon of 90 days Replimune is expected to generate 6.72 times less return on investment than Compass Therapeutics. But when comparing it to its historical volatility, Replimune Group is 2.1 times less risky than Compass Therapeutics. It trades about 0.12 of its potential returns per unit of risk. Compass Therapeutics is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest 140.00 in Compass Therapeutics on November 3, 2024 and sell it today you would earn a total of 162.00 from holding Compass Therapeutics or generate 115.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Replimune Group vs. Compass Therapeutics
Performance |
| Timeline |
| Replimune Group |
| Compass Therapeutics |
Replimune and Compass Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Replimune and Compass Therapeutics
The main advantage of trading using opposite Replimune and Compass Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Replimune position performs unexpectedly, Compass Therapeutics 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 Compass Therapeutics will offset losses from the drop in Compass Therapeutics' long position.| Replimune vs. Nuvalent | Replimune vs. Ventyx Biosciences | Replimune vs. Ascendis Pharma AS | Replimune vs. United Therapeutics |
| Compass Therapeutics vs. Ideaya Biosciences | Compass Therapeutics vs. AnaptysBio | Compass Therapeutics vs. MeiraGTx Holdings PLC | Compass Therapeutics vs. Keros Therapeutics |
Check out your portfolio center.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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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