Correlation Between Replimune and Centessa Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Replimune and Centessa Pharmaceuticals 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 Centessa Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Replimune Group and Centessa Pharmaceuticals PLC, you can compare the effects of market volatilities on Replimune and Centessa Pharmaceuticals 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 Centessa Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Replimune and Centessa Pharmaceuticals.
Diversification Opportunities for Replimune and Centessa Pharmaceuticals
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Replimune and Centessa is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Replimune Group and Centessa Pharmaceuticals PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centessa Pharmaceuticals 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 Centessa Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centessa Pharmaceuticals has no effect on the direction of Replimune i.e., Replimune and Centessa Pharmaceuticals go up and down completely randomly.
Pair Corralation between Replimune and Centessa Pharmaceuticals
Given the investment horizon of 90 days Replimune Group is expected to generate 1.6 times more return on investment than Centessa Pharmaceuticals. However, Replimune is 1.6 times more volatile than Centessa Pharmaceuticals PLC. It trades about -0.02 of its potential returns per unit of risk. Centessa Pharmaceuticals PLC is currently generating about -0.24 per unit of risk. If you would invest 1,234 in Replimune Group on October 24, 2024 and sell it today you would lose (49.00) from holding Replimune Group or give up 3.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Replimune Group vs. Centessa Pharmaceuticals PLC
Performance |
| Timeline |
| Replimune Group |
| Centessa Pharmaceuticals |
Replimune and Centessa Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Replimune and Centessa Pharmaceuticals
The main advantage of trading using opposite Replimune and Centessa Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Replimune position performs unexpectedly, Centessa Pharmaceuticals 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 Centessa Pharmaceuticals will offset losses from the drop in Centessa Pharmaceuticals' long position.| Replimune vs. Nuvalent | Replimune vs. Ventyx Biosciences | Replimune vs. Ascendis Pharma AS | Replimune vs. United 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 CEOs Directory module to screen CEOs from public companies around the world.
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