Correlation Between Veracyte and Repligen

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

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

Diversification Opportunities for Veracyte and Repligen

0.65

Correlation Coefficient

Veracyte  Repligen

Poor diversification

The 3 months correlation between Veracyte and Repligen is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Veracyte and Repligen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Repligen and Veracyte 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 Veracyte are associated (or correlated) with Repligen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Repligen has no effect on the direction of Veracyte i.e., Veracyte and Repligen go up and down completely randomly.

Pair Corralation between Veracyte and Repligen

Given the investment horizon of 90 days Veracyte is expected to under-perform the Repligen. But the stock apears to be less risky and, when comparing its historical volatility, Veracyte is 1.08 times less risky than Repligen. The stock trades about -0.14 of its potential returns per unit of risk. The Repligen is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  15,987  in Repligen on February 3, 2025 and sell it today you would lose (1,836) from holding Repligen or give up 11.48% of portfolio value over 90 days.

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

Veracyte  vs.  Repligen

Veracyte

Risk-Adjusted Performance

Very Weak

Over the last 90 days Veracyte has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in June 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Repligen

Risk-Adjusted Performance

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 latest fragile performance, the Stock's technical and fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Veracyte and Repligen

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

The idea behind Veracyte and Repligen 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.