Correlation Between West Pharmaceutical and Repligen
Can any of the company-specific risk be diversified away by investing in both West Pharmaceutical and Repligen 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 West Pharmaceutical and Repligen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between West Pharmaceutical Services and Repligen, you can compare the effects of market volatilities on West Pharmaceutical and Repligen 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 West Pharmaceutical with a short position of Repligen. Check out your portfolio center. Please also check ongoing floating volatility patterns of West Pharmaceutical and Repligen.
Diversification Opportunities for West Pharmaceutical and Repligen
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between West and Repligen is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding West Pharmaceutical Services and Repligen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Repligen and West Pharmaceutical 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 West Pharmaceutical Services are associated (or correlated) with Repligen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Repligen has no effect on the direction of West Pharmaceutical i.e., West Pharmaceutical and Repligen go up and down completely randomly.
Pair Corralation between West Pharmaceutical and Repligen
Considering the 90-day investment horizon West Pharmaceutical is expected to generate 3.4 times less return on investment than Repligen. But when comparing it to its historical volatility, West Pharmaceutical Services is 1.43 times less risky than Repligen. It trades about 0.15 of its potential returns per unit of risk. Repligen is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 14,305 in Repligen on November 3, 2024 and sell it today you would earn a total of 2,316 from holding Repligen or generate 16.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
West Pharmaceutical Services vs. Repligen
Performance |
| Timeline |
| West Pharmaceutical |
| Repligen |
West Pharmaceutical and Repligen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with West Pharmaceutical and Repligen
The main advantage of trading using opposite West Pharmaceutical and Repligen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if West Pharmaceutical position performs unexpectedly, Repligen 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 Repligen will offset losses from the drop in Repligen's long position.| West Pharmaceutical vs. Teleflex Incorporated | West Pharmaceutical vs. Alcon AG | West Pharmaceutical vs. ResMed Inc | West Pharmaceutical vs. ICU Medical |
| Repligen vs. Intuitive Surgical | Repligen vs. ResMed Inc | Repligen vs. Merit Medical Systems | Repligen vs. ICU Medical |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |