Correlation Between Regeneron Pharmaceuticals and Ralph Lauren

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

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

Diversification Opportunities for Regeneron Pharmaceuticals and Ralph Lauren

-0.61

Correlation Coefficient

Regeneron Pharmaceuticals  Ralph Lauren

Excellent diversification

The 3 months correlation between Regeneron and Ralph is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Regeneron Pharmaceuticals and Ralph Lauren Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ralph Lauren 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 Ralph Lauren. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ralph Lauren Corp has no effect on the direction of Regeneron Pharmaceuticals i.e., Regeneron Pharmaceuticals and Ralph Lauren go up and down completely randomly.

Pair Corralation between Regeneron Pharmaceuticals and Ralph Lauren

Given the investment horizon of 90 days Regeneron Pharmaceuticals is expected to generate 1.93 times less return on investment than Ralph Lauren. But when comparing it to its historical volatility, Regeneron Pharmaceuticals is 1.44 times less risky than Ralph Lauren. It trades about 0.04 of its potential returns per unit of risk. Ralph Lauren Corp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  24,600  in Ralph Lauren Corp on December 4, 2024 and sell it today you would earn a total of  672.00  from holding Ralph Lauren Corp or generate 2.73% return on investment over 90 days.

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

Regeneron Pharmaceuticals  vs.  Ralph Lauren Corp

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.

Ralph Lauren Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ralph Lauren Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating essential indicators, Ralph Lauren may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Regeneron Pharmaceuticals and Ralph Lauren

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

The idea behind Regeneron Pharmaceuticals and Ralph Lauren 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.