Correlation Between Replimune and Alx Oncology

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

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

Diversification Opportunities for Replimune and Alx Oncology

-0.24

Correlation Coefficient

Replimune  Alx Oncology

Very good diversification

The 3 months correlation between Replimune and Alx is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Replimune Group 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 Replimune 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 Replimune Group 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 Replimune i.e., Replimune and Alx Oncology go up and down completely randomly.

Pair Corralation between Replimune and Alx Oncology

Given the investment horizon of 90 days Replimune Group is expected to generate 0.97 times more return on investment than Alx Oncology. However, Replimune Group is 1.04 times less risky than Alx Oncology. It trades about 0.05 of its potential returns per unit of risk. Alx Oncology Holdings is currently generating about -0.02 per unit of risk. 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

Replimune Group  vs.  Alx Oncology Holdings

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.

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.

Pair Trading with Replimune and Alx Oncology

The main advantage of trading using opposite Replimune and Alx Oncology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Replimune 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.

The idea behind Replimune Group 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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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.