Correlation Between Repligen and Carl Zeiss

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

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

Diversification Opportunities for Repligen and Carl Zeiss

-0.44

Correlation Coefficient

Repligen  Carl Zeiss

Very good diversification

The 3 months correlation between Repligen and Carl is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Repligen and Carl Zeiss Meditec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carl Zeiss Meditec 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 are associated (or correlated) with Carl Zeiss. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carl Zeiss Meditec has no effect on the direction of Repligen i.e., Repligen and Carl Zeiss go up and down completely randomly.

Pair Corralation between Repligen and Carl Zeiss

Given the investment horizon of 90 days Repligen is expected to generate 0.75 times more return on investment than Carl Zeiss. However, Repligen is 1.34 times less risky than Carl Zeiss. It trades about 0.01 of its potential returns per unit of risk. Carl Zeiss Meditec is currently generating about -0.08 per unit of risk. If you would invest  14,593  in Repligen on September 27, 2024 and sell it today you would lose (139.50) from holding Repligen or give up 0.96% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Repligen  vs.  Carl Zeiss Meditec

Repligen

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Repligen has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Repligen is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Carl Zeiss Meditec

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Repligen and Carl Zeiss

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

The idea behind Repligen and Carl Zeiss Meditec 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.