Correlation Between Regeneron Pharmaceuticals and Moderna

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

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

Diversification Opportunities for Regeneron Pharmaceuticals and Moderna

0.43

Correlation Coefficient

Regeneron Pharmaceuticals  Moderna

Very weak diversification

The 3 months correlation between Regeneron and Moderna is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Regeneron Pharmaceuticals and Moderna in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moderna 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 Moderna. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moderna has no effect on the direction of Regeneron Pharmaceuticals i.e., Regeneron Pharmaceuticals and Moderna go up and down completely randomly.

Pair Corralation between Regeneron Pharmaceuticals and Moderna

Given the investment horizon of 90 days Regeneron Pharmaceuticals is expected to generate 0.38 times more return on investment than Moderna. However, Regeneron Pharmaceuticals is 2.61 times less risky than Moderna. It trades about -0.07 of its potential returns per unit of risk. Moderna is currently generating about -0.04 per unit of risk. If you would invest  70,169  in Regeneron Pharmaceuticals on December 30, 2024 and sell it today you would lose (6,433) from holding Regeneron Pharmaceuticals or give up 9.17% of portfolio value over 90 days.

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

Regeneron Pharmaceuticals  vs.  Moderna

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.

Moderna

Risk-Adjusted Performance

Very Weak

Over the last 90 days Moderna has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Regeneron Pharmaceuticals and Moderna

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

The idea behind Regeneron Pharmaceuticals and Moderna 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.