Correlation Between Repligen and Becton Dickinson

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

Diversification Opportunities for Repligen and Becton Dickinson

0.76
  Correlation Coefficient

Poor diversification

The 3 months correlation between Repligen and Becton is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Repligen Cp and Becton Dickinson And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Becton Dickinson And 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 Cp are associated (or correlated) with Becton Dickinson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Becton Dickinson And has no effect on the direction of Repligen i.e., Repligen and Becton Dickinson go up and down completely randomly.

Pair Corralation between Repligen and Becton Dickinson

Given the investment horizon of 90 days Repligen Cp is expected to generate 2.2 times more return on investment than Becton Dickinson. However, Repligen is 2.2 times more volatile than Becton Dickinson And. It trades about 0.02 of its potential returns per unit of risk. Becton Dickinson And is currently generating about -0.15 per unit of risk. If you would invest  21,277  in Repligen Cp on July 7, 2022 and sell it today you would earn a total of  78.00  from holding Repligen Cp or generate 0.37% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy95.45%
ValuesDaily Returns

Repligen Cp  vs.  Becton Dickinson And

 Performance (%) 
       Timeline  
Repligen Cp 
Repligen Performance
7 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Repligen Cp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting technical and fundamental indicators, Repligen disclosed solid returns over the last few months and may actually be approaching a breakup point.

Repligen Price Channel

Becton Dickinson And 
Becton Performance
0 of 100
Over the last 90 days Becton Dickinson And has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong fundamental indicators, Becton Dickinson is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Becton Price Channel

Repligen and Becton Dickinson Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Repligen and Becton Dickinson

The main advantage of trading using opposite Repligen and Becton Dickinson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Repligen position performs unexpectedly, Becton Dickinson 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 Becton Dickinson will offset losses from the drop in Becton Dickinson's long position.
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The idea behind Repligen Cp and Becton Dickinson And 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 CEO Directory module to screen CEOs from public companies around the world.

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