Correlation Between Repligen and Mills Music

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

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

Diversification Opportunities for Repligen and Mills Music

-0.8

Correlation Coefficient

Repligen  Mills Music

Pay attention - limited upside

The 3 months correlation between Repligen and Mills is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Repligen and Mills Music Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mills Music Trust 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 Mills Music. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mills Music Trust has no effect on the direction of Repligen i.e., Repligen and Mills Music go up and down completely randomly.

Pair Corralation between Repligen and Mills Music

Given the investment horizon of 90 days Repligen is expected to generate 2.83 times less return on investment than Mills Music. In addition to that, Repligen is 1.11 times more volatile than Mills Music Trust. It trades about 0.01 of its total potential returns per unit of risk. Mills Music Trust is currently generating about 0.02 per unit of volatility. If you would invest  3,331  in Mills Music Trust on March 2, 2024 and sell it today you would earn a total of  269.00  from holding Mills Music Trust or generate 8.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	83.86%
Values	Daily Returns

Repligen  vs.  Mills Music Trust

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 July 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Mills Music Trust

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Mills Music Trust are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Mills Music is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Repligen and Mills Music

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

The idea behind Repligen and Mills Music Trust 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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.