Correlation Between Iterum Therapeutics and Rein Therapeutics

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

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

Diversification Opportunities for Iterum Therapeutics and Rein Therapeutics

-0.35

Correlation Coefficient

Iterum Therapeutics  Rein Therapeutics

Very good diversification

The 3 months correlation between Iterum and Rein is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Iterum Therapeutics PLC and Rein Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rein Therapeutics and Iterum Therapeutics 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 Iterum Therapeutics PLC are associated (or correlated) with Rein Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rein Therapeutics has no effect on the direction of Iterum Therapeutics i.e., Iterum Therapeutics and Rein Therapeutics go up and down completely randomly.

Pair Corralation between Iterum Therapeutics and Rein Therapeutics

Given the investment horizon of 90 days Iterum Therapeutics PLC is expected to under-perform the Rein Therapeutics. But the stock apears to be less risky and, when comparing its historical volatility, Iterum Therapeutics PLC is 1.1 times less risky than Rein Therapeutics. The stock trades about -0.08 of its potential returns per unit of risk. The Rein Therapeutics is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  119.00  in Rein Therapeutics on September 10, 2025 and sell it today you would earn a total of  26.00  from holding Rein Therapeutics or generate 21.85% return on investment over 90 days.

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

Iterum Therapeutics PLC  vs.  Rein Therapeutics

Iterum Therapeutics PLC

Risk-Adjusted Performance

Weakest

Over the last 90 days Iterum Therapeutics PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2026. The recent disarray may also be a sign of long period up-swing for the firm investors.

Rein Therapeutics

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Rein Therapeutics are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Rein Therapeutics showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Iterum Therapeutics and Rein Therapeutics

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

The idea behind Iterum Therapeutics PLC and Rein Therapeutics 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..