Correlation Between Repligen and Nike

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

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

Diversification Opportunities for Repligen and Nike

0.77

Correlation Coefficient

Repligen  Nike

Poor diversification

The 3 months correlation between Repligen and Nike is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Repligen and Nike Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nike Inc 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 Nike. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nike Inc has no effect on the direction of Repligen i.e., Repligen and Nike go up and down completely randomly.

Pair Corralation between Repligen and Nike

Given the investment horizon of 90 days Repligen is expected to generate 1.55 times more return on investment than Nike. However, Repligen is 1.55 times more volatile than Nike Inc. It trades about 0.02 of its potential returns per unit of risk. Nike Inc is currently generating about 0.0 per unit of risk. If you would invest  14,407  in Repligen on February 1, 2024 and sell it today you would earn a total of  2,013  from holding Repligen or generate 13.97% return on investment over 90 days.

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

Repligen  vs.  Nike Inc

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 unfluctuating 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.

Nike Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nike Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's forward-looking signals remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Repligen and Nike

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

The idea behind Repligen and Nike Inc 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.