Correlation Between Regeneron Pharmaceuticals and Viemed Healthcare

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

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

Diversification Opportunities for Regeneron Pharmaceuticals and Viemed Healthcare

-0.15

Correlation Coefficient

Regeneron Pharmaceuticals  Viemed Healthcare

Good diversification

The 3 months correlation between Regeneron and Viemed is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Regeneron Pharmaceuticals and Viemed Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viemed Healthcare 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 Viemed Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viemed Healthcare has no effect on the direction of Regeneron Pharmaceuticals i.e., Regeneron Pharmaceuticals and Viemed Healthcare go up and down completely randomly.

Pair Corralation between Regeneron Pharmaceuticals and Viemed Healthcare

Given the investment horizon of 90 days Regeneron Pharmaceuticals is expected to under-perform the Viemed Healthcare. But the stock apears to be less risky and, when comparing its historical volatility, Regeneron Pharmaceuticals is 1.23 times less risky than Viemed Healthcare. The stock trades about -0.34 of its potential returns per unit of risk. The Viemed Healthcare is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  733.00  in Viemed Healthcare on September 30, 2024 and sell it today you would earn a total of  83.00  from holding Viemed Healthcare or generate 11.32% return on investment over 90 days.

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

Regeneron Pharmaceuticals  vs.  Viemed Healthcare

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 January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Viemed Healthcare

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Viemed Healthcare are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile primary indicators, Viemed Healthcare may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Regeneron Pharmaceuticals and Viemed Healthcare

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

The idea behind Regeneron Pharmaceuticals and Viemed Healthcare 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.