Correlation Between Arrow Electronics and Regeneron Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Arrow Electronics 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 Arrow Electronics and Regeneron Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arrow Electronics and Regeneron Pharmaceuticals, you can compare the effects of market volatilities on Arrow Electronics 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 Arrow Electronics with a short position of Regeneron Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arrow Electronics and Regeneron Pharmaceuticals.
Diversification Opportunities for Arrow Electronics and Regeneron Pharmaceuticals
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Arrow and Regeneron is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Arrow Electronics and Regeneron Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regeneron Pharmaceuticals and Arrow Electronics 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 Arrow Electronics 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 Arrow Electronics i.e., Arrow Electronics and Regeneron Pharmaceuticals go up and down completely randomly.
Pair Corralation between Arrow Electronics and Regeneron Pharmaceuticals
Considering the 90-day investment horizon Arrow Electronics is expected to generate 1.23 times more return on investment than Regeneron Pharmaceuticals. However, Arrow Electronics is 1.23 times more volatile than Regeneron Pharmaceuticals. It trades about 0.04 of its potential returns per unit of risk. Regeneron Pharmaceuticals is currently generating about -0.4 per unit of risk. If you would invest 11,867 in Arrow Electronics on September 1, 2024 and sell it today you would earn a total of 149.00 from holding Arrow Electronics or generate 1.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arrow Electronics vs. Regeneron Pharmaceuticals
Performance |
| Timeline |
| Arrow Electronics |
| Regeneron Pharmaceuticals |
Arrow Electronics and Regeneron Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arrow Electronics and Regeneron Pharmaceuticals
The main advantage of trading using opposite Arrow Electronics and Regeneron Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arrow Electronics 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.| Arrow Electronics vs. Insight Enterprises | Arrow Electronics vs. Synnex | Arrow Electronics vs. Climb Global Solutions | Arrow Electronics vs. ScanSource |
| Regeneron Pharmaceuticals vs. Tff Pharmaceuticals | Regeneron Pharmaceuticals vs. Eliem Therapeutics | Regeneron Pharmaceuticals vs. Inhibrx | Regeneron Pharmaceuticals vs. Enliven Therapeutics |
Check out your portfolio center.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.
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