Correlation Between Cyclerion Therapeutics and Replimune

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

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

Diversification Opportunities for Cyclerion Therapeutics and Replimune

-0.49

Correlation Coefficient

Cyclerion Therapeutics  Replimune

Very good diversification

The 3 months correlation between Cyclerion and Replimune is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Cyclerion Therapeutics and Replimune Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Replimune Group and Cyclerion Therapeutics 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 Cyclerion Therapeutics 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 Cyclerion Therapeutics i.e., Cyclerion Therapeutics and Replimune go up and down completely randomly.

Pair Corralation between Cyclerion Therapeutics and Replimune

Given the investment horizon of 90 days Cyclerion Therapeutics is expected to generate 2.65 times less return on investment than Replimune. In addition to that, Cyclerion Therapeutics is 2.15 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 0.11 per unit of volatility. If you would invest  1,028  in Replimune Group on September 2, 2024 and sell it today you would earn a total of  380.00  from holding Replimune Group or generate 36.96% return on investment over 90 days.

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

Cyclerion Therapeutics  vs.  Replimune Group

Cyclerion Therapeutics

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Cyclerion Therapeutics are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, Cyclerion Therapeutics displayed solid returns over the last few months and may actually be approaching a breakup point.

Replimune Group

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Replimune Group are ranked lower than 8 (%) 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 Cyclerion Therapeutics and Replimune

The main advantage of trading using opposite Cyclerion Therapeutics and Replimune positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cyclerion Therapeutics 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 Cyclerion Therapeutics 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.