Correlation Between Artisan Partners and Regeneron Pharmaceuticals

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

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

Diversification Opportunities for Artisan Partners and Regeneron Pharmaceuticals

0.08

Correlation Coefficient

Artisan Partners  Regeneron Pharmaceuticals

Significant diversification

The 3 months correlation between Artisan and Regeneron is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Partners Asset and Regeneron Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regeneron Pharmaceuticals and Artisan Partners 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 Artisan Partners Asset are associated (or correlated) with Regeneron Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regeneron Pharmaceuticals has no effect on the direction of Artisan Partners i.e., Artisan Partners and Regeneron Pharmaceuticals go up and down completely randomly.

Pair Corralation between Artisan Partners and Regeneron Pharmaceuticals

Given the investment horizon of 90 days Artisan Partners Asset is expected to generate 0.87 times more return on investment than Regeneron Pharmaceuticals. However, Artisan Partners Asset is 1.15 times less risky than Regeneron Pharmaceuticals. It trades about -0.03 of its potential returns per unit of risk. Regeneron Pharmaceuticals is currently generating about -0.07 per unit of risk. If you would invest  4,190  in Artisan Partners Asset on December 29, 2024 and sell it today you would lose (162.00) from holding Artisan Partners Asset or give up 3.87% of portfolio value over 90 days.

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

Artisan Partners Asset  vs.  Regeneron Pharmaceuticals

Artisan Partners Asset

Risk-Adjusted Performance

Very Weak

Over the last 90 days Artisan Partners Asset has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Artisan Partners is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Regeneron Pharmaceuticals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Regeneron Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak 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 Artisan Partners and Regeneron Pharmaceuticals

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

The idea behind Artisan Partners Asset and Regeneron Pharmaceuticals 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.