Correlation Between Repligen and Alx Oncology

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

Diversification Opportunities for Repligen and Alx Oncology

0.23
  Correlation Coefficient

Modest diversification

The 3 months correlation between Repligen and Alx Oncology is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Repligen and Alx Oncology Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alx Oncology Holdings and Repligen 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 Repligen are associated (or correlated) with Alx Oncology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alx Oncology Holdings has no effect on the direction of Repligen i.e., Repligen and Alx Oncology go up and down completely randomly.

Pair Corralation between Repligen and Alx Oncology

Given the investment horizon of 90 days Repligen is expected to generate 0.66 times more return on investment than Alx Oncology. However, Repligen is 1.51 times less risky than Alx Oncology. It trades about 0.02 of its potential returns per unit of risk. Alx Oncology Holdings is currently generating about -0.06 per unit of risk. If you would invest  18,248  in Repligen on September 7, 2022 and sell it today you would lose (387.00)  from holding Repligen or give up 2.12% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Repligen  vs.  Alx Oncology Holdings

 Performance (%) 
       Timeline  
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 unsteady performance in the last few months, the Stock's technical and fundamental indicators remain quite persistent which may send shares a bit higher in January 2023. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Repligen Price Channel

Alx Oncology Holdings 
Alx Oncology Performance
0 of 100
Over the last 90 days Alx Oncology Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Alx Oncology is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Alx Oncology Price Channel

Repligen and Alx Oncology Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Repligen and Alx Oncology

The main advantage of trading using opposite Repligen and Alx Oncology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Repligen position performs unexpectedly, Alx Oncology 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 Alx Oncology will offset losses from the drop in Alx Oncology's long position.
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The idea behind Repligen and Alx Oncology Holdings 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.

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