Correlation Between Compania Cervecerias and Regeneron Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Compania Cervecerias 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 Compania Cervecerias and Regeneron Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Compania Cervecerias Unidas and Regeneron Pharmaceuticals, you can compare the effects of market volatilities on Compania Cervecerias 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 Compania Cervecerias with a short position of Regeneron Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compania Cervecerias and Regeneron Pharmaceuticals.
Diversification Opportunities for Compania Cervecerias and Regeneron Pharmaceuticals
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Compania and Regeneron is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Compania Cervecerias Unidas and Regeneron Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regeneron Pharmaceuticals and Compania Cervecerias 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 Compania Cervecerias Unidas 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 Compania Cervecerias i.e., Compania Cervecerias and Regeneron Pharmaceuticals go up and down completely randomly.
Pair Corralation between Compania Cervecerias and Regeneron Pharmaceuticals
Considering the 90-day investment horizon Compania Cervecerias Unidas is expected to generate 0.48 times more return on investment than Regeneron Pharmaceuticals. However, Compania Cervecerias Unidas is 2.1 times less risky than Regeneron Pharmaceuticals. It trades about 0.34 of its potential returns per unit of risk. Regeneron Pharmaceuticals is currently generating about -0.09 per unit of risk. If you would invest 1,133 in Compania Cervecerias Unidas on November 1, 2024 and sell it today you would earn a total of 75.00 from holding Compania Cervecerias Unidas or generate 6.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compania Cervecerias Unidas vs. Regeneron Pharmaceuticals
Performance |
| Timeline |
| Compania Cervecerias |
| Regeneron Pharmaceuticals |
Compania Cervecerias and Regeneron Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compania Cervecerias and Regeneron Pharmaceuticals
The main advantage of trading using opposite Compania Cervecerias and Regeneron Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compania Cervecerias 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.| Compania Cervecerias vs. Boston Beer | Compania Cervecerias vs. Molson Coors Beverage | Compania Cervecerias vs. Ambev SA ADR | Compania Cervecerias vs. Molson Coors Brewing |
| Regeneron Pharmaceuticals vs. Crispr Therapeutics AG | Regeneron Pharmaceuticals vs. Novo Nordisk AS | Regeneron Pharmaceuticals vs. Sarepta Therapeutics | Regeneron Pharmaceuticals vs. Intellia 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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