Correlation Between Pacira BioSciences, and Regencell Bioscience

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

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

Diversification Opportunities for Pacira BioSciences, and Regencell Bioscience

-0.14

Correlation Coefficient

Pacira BioSciences,  Regencell Bioscience

Good diversification

The 3 months correlation between Pacira and Regencell is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Pacira BioSciences, and Regencell Bioscience Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regencell Bioscience and Pacira BioSciences, 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 Pacira BioSciences, are associated (or correlated) with Regencell Bioscience. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regencell Bioscience has no effect on the direction of Pacira BioSciences, i.e., Pacira BioSciences, and Regencell Bioscience go up and down completely randomly.

Pair Corralation between Pacira BioSciences, and Regencell Bioscience

Given the investment horizon of 90 days Pacira BioSciences, is expected to under-perform the Regencell Bioscience. But the stock apears to be less risky and, when comparing its historical volatility, Pacira BioSciences, is 5.57 times less risky than Regencell Bioscience. The stock trades about -0.01 of its potential returns per unit of risk. The Regencell Bioscience Holdings is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  1,630  in Regencell Bioscience Holdings on September 21, 2024 and sell it today you would lose (1,138) from holding Regencell Bioscience Holdings or give up 69.82% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	94.48%
Values	Daily Returns

Pacira BioSciences,  vs.  Regencell Bioscience Holdings

Pacira BioSciences,

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Pacira BioSciences, are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Pacira BioSciences, showed solid returns over the last few months and may actually be approaching a breakup point.

Regencell Bioscience

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Regencell Bioscience Holdings are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile technical and fundamental indicators, Regencell Bioscience may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Pacira BioSciences, and Regencell Bioscience

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

The idea behind Pacira BioSciences, and Regencell Bioscience Holdings 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.