Correlation Between Vera Bradley and Repligen

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

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

Diversification Opportunities for Vera Bradley and Repligen

0.51

Correlation Coefficient

Vera Bradley  Repligen

Very weak diversification

The 3 months correlation between Vera and Repligen is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Vera Bradley and Repligen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Repligen and Vera Bradley 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 Vera Bradley are associated (or correlated) with Repligen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Repligen has no effect on the direction of Vera Bradley i.e., Vera Bradley and Repligen go up and down completely randomly.

Pair Corralation between Vera Bradley and Repligen

Considering the 90-day investment horizon Vera Bradley is expected to generate 0.81 times more return on investment than Repligen. However, Vera Bradley is 1.24 times less risky than Repligen. It trades about 0.08 of its potential returns per unit of risk. Repligen is currently generating about 0.04 per unit of risk. If you would invest  533.00  in Vera Bradley on September 4, 2024 and sell it today you would earn a total of  61.00  from holding Vera Bradley or generate 11.44% return on investment over 90 days.

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

Vera Bradley  vs.  Repligen

Vera Bradley

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Vera Bradley are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Vera Bradley sustained solid returns over the last few months and may actually be approaching a breakup point.

Repligen

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Repligen are ranked lower than 2 (%) 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.

Pair Trading with Vera Bradley and Repligen

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

The idea behind Vera Bradley and Repligen 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.