Correlation Between Regeneron Pharmaceuticals and Douglas Emmett

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

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

Diversification Opportunities for Regeneron Pharmaceuticals and Douglas Emmett

0.1

Correlation Coefficient

Regeneron Pharmaceuticals  Douglas Emmett

Average diversification

The 3 months correlation between Regeneron and Douglas is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Regeneron Pharmaceuticals and Douglas Emmett in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Douglas Emmett and Regeneron Pharmaceuticals 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 Regeneron Pharmaceuticals are associated (or correlated) with Douglas Emmett. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Douglas Emmett has no effect on the direction of Regeneron Pharmaceuticals i.e., Regeneron Pharmaceuticals and Douglas Emmett go up and down completely randomly.

Pair Corralation between Regeneron Pharmaceuticals and Douglas Emmett

Given the investment horizon of 90 days Regeneron Pharmaceuticals is expected to under-perform the Douglas Emmett. But the stock apears to be less risky and, when comparing its historical volatility, Regeneron Pharmaceuticals is 1.81 times less risky than Douglas Emmett. The stock trades about -0.01 of its potential returns per unit of risk. The Douglas Emmett is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  1,481  in Douglas Emmett on October 26, 2024 and sell it today you would earn a total of  243.00  from holding Douglas Emmett or generate 16.41% return on investment over 90 days.

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

Regeneron Pharmaceuticals  vs.  Douglas Emmett

Regeneron Pharmaceuticals

Risk-Adjusted Performance

0 of 100

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 weak performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Douglas Emmett

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Douglas Emmett has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical and fundamental indicators, Douglas Emmett is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Regeneron Pharmaceuticals and Douglas Emmett

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

The idea behind Regeneron Pharmaceuticals and Douglas Emmett 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.