Correlation Between Regeneron Pharmaceuticals and Mars Acquisition

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

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

Diversification Opportunities for Regeneron Pharmaceuticals and Mars Acquisition

-0.73

Correlation Coefficient

Regeneron Pharmaceuticals  Mars Acquisition

Pay attention - limited upside

The 3 months correlation between Regeneron and Mars is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Regeneron Pharmaceuticals and Mars Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mars Acquisition 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 Mars Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mars Acquisition Corp has no effect on the direction of Regeneron Pharmaceuticals i.e., Regeneron Pharmaceuticals and Mars Acquisition go up and down completely randomly.

Pair Corralation between Regeneron Pharmaceuticals and Mars Acquisition

Given the investment horizon of 90 days Regeneron Pharmaceuticals is expected to generate 203.85 times less return on investment than Mars Acquisition. But when comparing it to its historical volatility, Regeneron Pharmaceuticals is 7.68 times less risky than Mars Acquisition. It trades about 0.0 of its potential returns per unit of risk. Mars Acquisition Corp is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  22.00  in Mars Acquisition Corp on October 8, 2024 and sell it today you would earn a total of  16.00  from holding Mars Acquisition Corp or generate 72.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	43.88%
Values	Daily Returns

Regeneron Pharmaceuticals  vs.  Mars Acquisition 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.

Mars Acquisition Corp

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mars Acquisition Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent basic indicators, Mars Acquisition reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Regeneron Pharmaceuticals and Mars Acquisition

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

The idea behind Regeneron Pharmaceuticals and Mars Acquisition 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..