Correlation Between Biogen and Sanofi ADR
Can any of the company-specific risk be diversified away by investing in both Biogen and Sanofi ADR 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 Biogen and Sanofi ADR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Biogen Inc and Sanofi ADR, you can compare the effects of market volatilities on Biogen and Sanofi ADR 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 Biogen with a short position of Sanofi ADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biogen and Sanofi ADR.
Diversification Opportunities for Biogen and Sanofi ADR
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Biogen and Sanofi is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Biogen Inc and Sanofi ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sanofi ADR and Biogen 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 Biogen Inc are associated (or correlated) with Sanofi ADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sanofi ADR has no effect on the direction of Biogen i.e., Biogen and Sanofi ADR go up and down completely randomly.
Pair Corralation between Biogen and Sanofi ADR
Given the investment horizon of 90 days Biogen Inc is expected to under-perform the Sanofi ADR. In addition to that, Biogen is 1.13 times more volatile than Sanofi ADR. It trades about -0.12 of its total potential returns per unit of risk. Sanofi ADR is currently generating about 0.01 per unit of volatility. If you would invest 5,156 in Sanofi ADR on November 9, 2024 and sell it today you would earn a total of 131.00 from holding Sanofi ADR or generate 2.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Biogen Inc vs. Sanofi ADR
Performance |
| Timeline |
| Biogen Inc |
| Sanofi ADR |
Biogen and Sanofi ADR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Biogen and Sanofi ADR
The main advantage of trading using opposite Biogen and Sanofi ADR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biogen position performs unexpectedly, Sanofi ADR 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 Sanofi ADR will offset losses from the drop in Sanofi ADR's long position.| Biogen vs. Bristol Myers Squibb | Biogen vs. AbbVie Inc | Biogen vs. Merck Company | Biogen vs. Gilead Sciences |
| Sanofi ADR vs. AstraZeneca PLC ADR | Sanofi ADR vs. Roche Holding Ltd | Sanofi ADR vs. GlaxoSmithKline PLC ADR | Sanofi ADR vs. Merck Company |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |