Correlation Between Vericel Corp and Regeneron Pharmaceuticals

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

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

Diversification Opportunities for Vericel Corp and Regeneron Pharmaceuticals

0.32

Correlation Coefficient

Vericel Corp  Regeneron Pharmaceuticals

Weak diversification

The 3 months correlation between Vericel and Regeneron is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Vericel Corp Ord and Regeneron Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regeneron Pharmaceuticals and Vericel Corp 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 Vericel Corp Ord are associated (or correlated) with Regeneron Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regeneron Pharmaceuticals has no effect on the direction of Vericel Corp i.e., Vericel Corp and Regeneron Pharmaceuticals go up and down completely randomly.

Pair Corralation between Vericel Corp and Regeneron Pharmaceuticals

Given the investment horizon of 90 days Vericel Corp Ord is expected to under-perform the Regeneron Pharmaceuticals. In addition to that, Vericel Corp is 1.24 times more volatile than Regeneron Pharmaceuticals. It trades about -0.12 of its total potential returns per unit of risk. Regeneron Pharmaceuticals is currently generating about -0.07 per unit of volatility. If you would invest  71,149  in Regeneron Pharmaceuticals on December 27, 2024 and sell it today you would lose (7,135) from holding Regeneron Pharmaceuticals or give up 10.03% of portfolio value over 90 days.

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

Vericel Corp Ord  vs.  Regeneron Pharmaceuticals

Vericel Corp Ord

Risk-Adjusted Performance

Very Weak

Over the last 90 days Vericel Corp Ord has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

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.

Pair Trading with Vericel Corp and Regeneron Pharmaceuticals

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

The idea behind Vericel Corp Ord and Regeneron Pharmaceuticals 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.