Correlation Between Regeneron Pharmaceuticals and Inter Parfums

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

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

Diversification Opportunities for Regeneron Pharmaceuticals and Inter Parfums

0.25

Correlation Coefficient

Regeneron Pharmaceuticals  Inter Parfums

Modest diversification

The 3 months correlation between Regeneron and Inter is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Regeneron Pharmaceuticals and Inter Parfums in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inter Parfums 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 Inter Parfums. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inter Parfums has no effect on the direction of Regeneron Pharmaceuticals i.e., Regeneron Pharmaceuticals and Inter Parfums go up and down completely randomly.

Pair Corralation between Regeneron Pharmaceuticals and Inter Parfums

Given the investment horizon of 90 days Regeneron Pharmaceuticals is expected to under-perform the Inter Parfums. In addition to that, Regeneron Pharmaceuticals is 1.01 times more volatile than Inter Parfums. It trades about -0.07 of its total potential returns per unit of risk. Inter Parfums is currently generating about -0.04 per unit of volatility. If you would invest  12,976  in Inter Parfums on December 29, 2024 and sell it today you would lose (827.00) from holding Inter Parfums or give up 6.37% of portfolio value over 90 days.

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

Regeneron Pharmaceuticals  vs.  Inter Parfums

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.

Inter Parfums

Risk-Adjusted Performance

Very Weak

Over the last 90 days Inter Parfums has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Inter Parfums is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Regeneron Pharmaceuticals and Inter Parfums

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

The idea behind Regeneron Pharmaceuticals and Inter Parfums 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.