Correlation Between Dennys Corp and Regeneron Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Dennys 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 Dennys 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 Dennys Corp and Regeneron Pharmaceuticals, you can compare the effects of market volatilities on Dennys 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 Dennys Corp with a short position of Regeneron Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dennys Corp and Regeneron Pharmaceuticals.
Diversification Opportunities for Dennys Corp and Regeneron Pharmaceuticals
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Dennys and Regeneron is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Dennys Corp and Regeneron Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regeneron Pharmaceuticals and Dennys 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 Dennys Corp 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 Dennys Corp i.e., Dennys Corp and Regeneron Pharmaceuticals go up and down completely randomly.
Pair Corralation between Dennys Corp and Regeneron Pharmaceuticals
Given the investment horizon of 90 days Dennys Corp is expected to under-perform the Regeneron Pharmaceuticals. In addition to that, Dennys Corp is 2.22 times more volatile than Regeneron Pharmaceuticals. It trades about -0.04 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 89,856 in Regeneron Pharmaceuticals on October 12, 2024 and sell it today you would lose (16,497) from holding Regeneron Pharmaceuticals or give up 18.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.47% |
| Values | Daily Returns |
Dennys Corp vs. Regeneron Pharmaceuticals
Performance |
| Timeline |
| Dennys Corp |
| Regeneron Pharmaceuticals |
Dennys Corp and Regeneron Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dennys Corp and Regeneron Pharmaceuticals
The main advantage of trading using opposite Dennys Corp and Regeneron Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dennys 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.| Dennys Corp vs. Brinker International | Dennys Corp vs. Bloomin Brands | Dennys Corp vs. Jack In The | Dennys Corp vs. BJs Restaurants |
| 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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