Correlation Between Replimune and Bioatla

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

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

Diversification Opportunities for Replimune and Bioatla

-0.09

Correlation Coefficient

Replimune  Bioatla

Good diversification

The 3 months correlation between Replimune and Bioatla is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Replimune Group and Bioatla in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bioatla 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 Bioatla. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bioatla has no effect on the direction of Replimune i.e., Replimune and Bioatla go up and down completely randomly.

Pair Corralation between Replimune and Bioatla

Given the investment horizon of 90 days Replimune Group is expected to generate 0.94 times more return on investment than Bioatla. However, Replimune Group is 1.06 times less risky than Bioatla. It trades about 0.05 of its potential returns per unit of risk. Bioatla is currently generating about -0.05 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.  Bioatla

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.

Bioatla

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bioatla has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Replimune and Bioatla

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

The idea behind Replimune Group and Bioatla 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.