Correlation Between Regeneron Pharmaceuticals and 127097AG8

Can any of the company-specific risk be diversified away by investing in both Regeneron Pharmaceuticals and 127097AG8 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 127097AG8 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Regeneron Pharmaceuticals and CTRA 39 15 MAY 27, you can compare the effects of market volatilities on Regeneron Pharmaceuticals and 127097AG8 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 127097AG8. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regeneron Pharmaceuticals and 127097AG8.

Diversification Opportunities for Regeneron Pharmaceuticals and 127097AG8

0.62

Correlation Coefficient

Regeneron Pharmaceuticals  127097AG8

Poor diversification

The 3 months correlation between Regeneron and 127097AG8 is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Regeneron Pharmaceuticals and CTRA 39 15 MAY 27 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CTRA 15 MAY 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 127097AG8. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CTRA 15 MAY has no effect on the direction of Regeneron Pharmaceuticals i.e., Regeneron Pharmaceuticals and 127097AG8 go up and down completely randomly.

Pair Corralation between Regeneron Pharmaceuticals and 127097AG8

Given the investment horizon of 90 days Regeneron Pharmaceuticals is expected to under-perform the 127097AG8. In addition to that, Regeneron Pharmaceuticals is 3.68 times more volatile than CTRA 39 15 MAY 27. It trades about -0.35 of its total potential returns per unit of risk. CTRA 39 15 MAY 27 is currently generating about -0.15 per unit of volatility. If you would invest  9,879  in CTRA 39 15 MAY 27 on September 13, 2024 and sell it today you would lose (403.00) from holding CTRA 39 15 MAY 27 or give up 4.08% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	88.89%
Values	Daily Returns

Regeneron Pharmaceuticals  vs.  CTRA 39 15 MAY 27

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 inconsistent performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

CTRA 15 MAY

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CTRA 39 15 MAY 27 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 127097AG8 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Regeneron Pharmaceuticals and 127097AG8

The main advantage of trading using opposite Regeneron Pharmaceuticals and 127097AG8 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regeneron Pharmaceuticals position performs unexpectedly, 127097AG8 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 127097AG8 will offset losses from the drop in 127097AG8's long position.

The idea behind Regeneron Pharmaceuticals and CTRA 39 15 MAY 27 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.