Correlation Between Repligen and Nova Minerals

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

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

Diversification Opportunities for Repligen and Nova Minerals

0.04

Correlation Coefficient

Repligen  Nova Minerals

Significant diversification

The 3 months correlation between Repligen and Nova is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Repligen and Nova Minerals Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nova Minerals Limited 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 Nova Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nova Minerals Limited has no effect on the direction of Repligen i.e., Repligen and Nova Minerals go up and down completely randomly.

Pair Corralation between Repligen and Nova Minerals

Given the investment horizon of 90 days Repligen is expected to under-perform the Nova Minerals. But the stock apears to be less risky and, when comparing its historical volatility, Repligen is 2.04 times less risky than Nova Minerals. The stock trades about 0.0 of its potential returns per unit of risk. The Nova Minerals Limited is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  480.00  in Nova Minerals Limited on September 12, 2024 and sell it today you would earn a total of  650.00  from holding Nova Minerals Limited or generate 135.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	39.92%
Values	Daily Returns

Repligen  vs.  Nova Minerals Limited

Repligen

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Repligen are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile technical and fundamental indicators, Repligen may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Nova Minerals Limited

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nova Minerals Limited are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Nova Minerals sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Repligen and Nova Minerals

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

The idea behind Repligen and Nova Minerals Limited 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.

Check out your portfolio center.

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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.