Correlation Between Ginkgo Bioworks and Regeneron Pharmaceuticals

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

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

Diversification Opportunities for Ginkgo Bioworks and Regeneron Pharmaceuticals

-0.43

Correlation Coefficient

Ginkgo Bioworks  Regeneron Pharmaceuticals

Very good diversification

The 3 months correlation between Ginkgo and Regeneron is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Ginkgo Bioworks Holdings and Regeneron Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regeneron Pharmaceuticals and Ginkgo Bioworks 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 Ginkgo Bioworks Holdings 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 Ginkgo Bioworks i.e., Ginkgo Bioworks and Regeneron Pharmaceuticals go up and down completely randomly.

Pair Corralation between Ginkgo Bioworks and Regeneron Pharmaceuticals

Considering the 90-day investment horizon Ginkgo Bioworks Holdings is expected to under-perform the Regeneron Pharmaceuticals. In addition to that, Ginkgo Bioworks is 4.18 times more volatile than Regeneron Pharmaceuticals. It trades about -0.25 of its total potential returns per unit of risk. Regeneron Pharmaceuticals is currently generating about 0.1 per unit of volatility. If you would invest  66,599  in Regeneron Pharmaceuticals on December 4, 2024 and sell it today you would earn a total of  2,459  from holding Regeneron Pharmaceuticals or generate 3.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

Ginkgo Bioworks Holdings  vs.  Regeneron Pharmaceuticals

Ginkgo Bioworks Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ginkgo Bioworks Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company 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 Ginkgo Bioworks and Regeneron Pharmaceuticals

The main advantage of trading using opposite Ginkgo Bioworks and Regeneron Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ginkgo Bioworks 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 Ginkgo Bioworks Holdings 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.