Correlation Between United States and Repligen
Can any of the company-specific risk be diversified away by investing in both United States 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 United States and Repligen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United States Steel and Repligen, you can compare the effects of market volatilities on United States 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 United States with a short position of Repligen. Check out your portfolio center. Please also check ongoing floating volatility patterns of United States and Repligen.
Diversification Opportunities for United States and Repligen
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between United and Repligen is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding United States Steel and Repligen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Repligen and United States 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 United States Steel 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 United States i.e., United States and Repligen go up and down completely randomly.
Pair Corralation between United States and Repligen
Taking into account the 90-day investment horizon United States is expected to generate 4.92 times less return on investment than Repligen. But when comparing it to its historical volatility, United States Steel is 1.26 times less risky than Repligen. It trades about 0.02 of its potential returns per unit of risk. Repligen is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 13,721 in Repligen on August 28, 2024 and sell it today you would earn a total of 885.00 from holding Repligen or generate 6.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United States Steel vs. Repligen
Performance |
| Timeline |
| United States Steel |
| Repligen |
United States and Repligen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United States and Repligen
The main advantage of trading using opposite United States and Repligen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United States 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.| United States vs. Nucor Corp | United States vs. Steel Dynamics | United States vs. ArcelorMittal SA ADR | United States vs. Gerdau SA ADR |
| 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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