Correlation Between Arcus Biosciences and Relay Therapeutics

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

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

Diversification Opportunities for Arcus Biosciences and Relay Therapeutics

0.88

Correlation Coefficient

Arcus Biosciences  Relay Therapeutics

Very poor diversification

The 3 months correlation between Arcus and Relay is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Arcus Biosciences and Relay Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Relay Therapeutics and Arcus Biosciences 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 Arcus Biosciences are associated (or correlated) with Relay Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Relay Therapeutics has no effect on the direction of Arcus Biosciences i.e., Arcus Biosciences and Relay Therapeutics go up and down completely randomly.

Pair Corralation between Arcus Biosciences and Relay Therapeutics

Given the investment horizon of 90 days Arcus Biosciences is expected to generate 0.73 times more return on investment than Relay Therapeutics. However, Arcus Biosciences is 1.38 times less risky than Relay Therapeutics. It trades about 0.26 of its potential returns per unit of risk. Relay Therapeutics is currently generating about 0.18 per unit of risk. If you would invest  822.00  in Arcus Biosciences on July 6, 2025 and sell it today you would earn a total of  513.00  from holding Arcus Biosciences or generate 62.41% return on investment over 90 days.

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

Arcus Biosciences  vs.  Relay Therapeutics

Arcus Biosciences

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Arcus Biosciences are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Arcus Biosciences unveiled solid returns over the last few months and may actually be approaching a breakup point.

Relay Therapeutics

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Relay Therapeutics are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Relay Therapeutics showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Arcus Biosciences and Relay Therapeutics

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

The idea behind Arcus Biosciences and Relay 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.