Correlation Between Alx Oncology and Replimune

Can any of the company-specific risk be diversified away by investing in both Alx Oncology and Replimune 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 Alx Oncology and Replimune into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Alx Oncology Holdings and Replimune Group, you can compare the effects of market volatilities on Alx Oncology and Replimune 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 Alx Oncology with a short position of Replimune. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alx Oncology and Replimune.

Diversification Opportunities for Alx Oncology and Replimune

-0.24

Correlation Coefficient

Alx Oncology  Replimune

Very good diversification

The 3 months correlation between Alx and Replimune is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Alx Oncology Holdings and Replimune Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Replimune Group and Alx Oncology 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 Alx Oncology Holdings are associated (or correlated) with Replimune. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Replimune Group has no effect on the direction of Alx Oncology i.e., Alx Oncology and Replimune go up and down completely randomly.

Pair Corralation between Alx Oncology and Replimune

Given the investment horizon of 90 days Alx Oncology Holdings is expected to under-perform the Replimune. In addition to that, Alx Oncology is 1.04 times more volatile than Replimune Group. It trades about -0.02 of its total potential returns per unit of risk. Replimune Group is currently generating about 0.05 per unit of volatility. If you would invest  1,123  in Replimune Group on September 19, 2024 and sell it today you would earn a total of  125.00  from holding Replimune Group or generate 11.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Alx Oncology Holdings  vs.  Replimune Group

Alx Oncology Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alx Oncology Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Replimune Group

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Replimune Group are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Replimune disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Alx Oncology and Replimune

The main advantage of trading using opposite Alx Oncology and Replimune positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alx Oncology position performs unexpectedly, Replimune 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 Replimune will offset losses from the drop in Replimune's long position.

The idea behind Alx Oncology Holdings and Replimune Group 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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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.