Correlation Between Repligen and Visionary Education

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

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

Diversification Opportunities for Repligen and Visionary Education

-0.31

Correlation Coefficient

Repligen  Visionary Education

Very good diversification

The 3 months correlation between Repligen and Visionary is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Repligen and Visionary Education Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Visionary Education 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 Visionary Education. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Visionary Education has no effect on the direction of Repligen i.e., Repligen and Visionary Education go up and down completely randomly.

Pair Corralation between Repligen and Visionary Education

Given the investment horizon of 90 days Repligen is expected to under-perform the Visionary Education. But the stock apears to be less risky and, when comparing its historical volatility, Repligen is 5.54 times less risky than Visionary Education. The stock trades about -0.14 of its potential returns per unit of risk. The Visionary Education Technology is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  19.00  in Visionary Education Technology on February 28, 2024 and sell it today you would earn a total of  1.00  from holding Visionary Education Technology or generate 5.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Repligen  vs.  Visionary Education Technology

Repligen

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Repligen has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in June 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Visionary Education

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Visionary Education Technology are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Visionary Education showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Repligen and Visionary Education

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

The idea behind Repligen and Visionary Education Technology 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.