Correlation Between Replimune and Cytokinetics

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

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

Diversification Opportunities for Replimune and Cytokinetics

0.06

Correlation Coefficient

Replimune  Cytokinetics

Significant diversification

The 3 months correlation between Replimune and Cytokinetics is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Replimune Group and Cytokinetics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cytokinetics and Replimune 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 Replimune Group are associated (or correlated) with Cytokinetics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cytokinetics has no effect on the direction of Replimune i.e., Replimune and Cytokinetics go up and down completely randomly.

Pair Corralation between Replimune and Cytokinetics

Given the investment horizon of 90 days Replimune Group is expected to generate 6.46 times more return on investment than Cytokinetics. However, Replimune is 6.46 times more volatile than Cytokinetics. It trades about 0.08 of its potential returns per unit of risk. Cytokinetics is currently generating about 0.01 per unit of risk. If you would invest  1,001  in Replimune Group on May 4, 2025 and sell it today you would lose (241.00) from holding Replimune Group or give up 24.08% of portfolio value over 90 days.

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

Replimune Group  vs.  Cytokinetics

Replimune Group

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Replimune Group are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Replimune disclosed solid returns over the last few months and may actually be approaching a breakup point.

Cytokinetics

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Cytokinetics are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Cytokinetics is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Replimune and Cytokinetics

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

The idea behind Replimune Group and Cytokinetics 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.