Correlation Between Hewlett Packard and Repligen

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Can any of the company-specific risk be diversified away by investing in both Hewlett Packard 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 Hewlett Packard and Repligen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hewlett Packard Enterprise and Repligen, you can compare the effects of market volatilities on Hewlett Packard 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 Hewlett Packard with a short position of Repligen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hewlett Packard and Repligen.

Diversification Opportunities for Hewlett Packard and Repligen

-0.4
  Correlation Coefficient

Very good diversification

The 3 months correlation between Hewlett and Repligen is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Hewlett Packard Enterprise and Repligen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Repligen and Hewlett Packard 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 Hewlett Packard Enterprise 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 Hewlett Packard i.e., Hewlett Packard and Repligen go up and down completely randomly.

Pair Corralation between Hewlett Packard and Repligen

Considering the 90-day investment horizon Hewlett Packard Enterprise is expected to generate 0.51 times more return on investment than Repligen. However, Hewlett Packard Enterprise is 1.94 times less risky than Repligen. It trades about 0.19 of its potential returns per unit of risk. Repligen is currently generating about -0.03 per unit of risk. If you would invest  1,303  in Hewlett Packard Enterprise on September 3, 2022 and sell it today you would earn a total of  366.00  from holding Hewlett Packard Enterprise or generate 28.09% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Hewlett Packard Enterprise  vs.  Repligen

 Performance (%) 
       Timeline  
Hewlett Packard Ente 
Hewlett Performance
14 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Hewlett Packard Enterprise are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Hewlett Packard exhibited solid returns over the last few months and may actually be approaching a breakup point.

Hewlett Price Channel

Repligen 
Repligen Performance
0 of 100
Over the last 90 days Repligen has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's technical and fundamental indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Repligen Price Channel

Hewlett Packard and Repligen Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Hewlett Packard and Repligen

The main advantage of trading using opposite Hewlett Packard and Repligen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hewlett Packard 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.
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The idea behind Hewlett Packard Enterprise and Repligen 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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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.

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