Correlation Between Relay Therapeutics and Replimune

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

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

Diversification Opportunities for Relay Therapeutics and Replimune

-0.01

Correlation Coefficient

Relay Therapeutics  Replimune

Good diversification

The 3 months correlation between Relay and Replimune is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Relay Therapeutics and Replimune Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Replimune Group and Relay 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 Relay Therapeutics are associated (or correlated) with Replimune. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Replimune Group has no effect on the direction of Relay Therapeutics i.e., Relay Therapeutics and Replimune go up and down completely randomly.

Pair Corralation between Relay Therapeutics and Replimune

Given the investment horizon of 90 days Relay Therapeutics is expected to generate 16.44 times less return on investment than Replimune. But when comparing it to its historical volatility, Relay Therapeutics is 4.77 times less risky than Replimune. It trades about 0.02 of its potential returns per unit of risk. Replimune Group is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1,001  in Replimune Group on May 5, 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 Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Relay Therapeutics  vs.  Replimune Group

Relay Therapeutics

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Relay Therapeutics are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Relay Therapeutics is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

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.

Pair Trading with Relay Therapeutics and Replimune

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

The idea behind Relay Therapeutics and Replimune Group 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.