Correlation Between Regeneron Pharmaceuticals and Lionsgate Studios

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

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

Diversification Opportunities for Regeneron Pharmaceuticals and Lionsgate Studios

-0.57

Correlation Coefficient

Regeneron Pharmaceuticals  Lionsgate Studios

Excellent diversification

The 3 months correlation between Regeneron and Lionsgate is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Regeneron Pharmaceuticals and Lionsgate Studios Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lionsgate Studios Corp 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 Lionsgate Studios. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lionsgate Studios Corp has no effect on the direction of Regeneron Pharmaceuticals i.e., Regeneron Pharmaceuticals and Lionsgate Studios go up and down completely randomly.

Pair Corralation between Regeneron Pharmaceuticals and Lionsgate Studios

Given the investment horizon of 90 days Regeneron Pharmaceuticals is expected to under-perform the Lionsgate Studios. But the stock apears to be less risky and, when comparing its historical volatility, Regeneron Pharmaceuticals is 1.34 times less risky than Lionsgate Studios. The stock trades about -0.13 of its potential returns per unit of risk. The Lionsgate Studios Corp is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  703.00  in Lionsgate Studios Corp on October 24, 2024 and sell it today you would lose (22.00) from holding Lionsgate Studios Corp or give up 3.13% of portfolio value over 90 days.

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

Regeneron Pharmaceuticals  vs.  Lionsgate Studios Corp

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.

Lionsgate Studios Corp

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Lionsgate Studios Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Lionsgate Studios is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Regeneron Pharmaceuticals and Lionsgate Studios

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

The idea behind Regeneron Pharmaceuticals and Lionsgate Studios Corp 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.