Correlation Between Editas Medicine and Regeneron Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Editas Medicine 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 Editas Medicine and Regeneron Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Editas Medicine and Regeneron Pharmaceuticals, you can compare the effects of market volatilities on Editas Medicine 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 Editas Medicine with a short position of Regeneron Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Editas Medicine and Regeneron Pharmaceuticals.
Diversification Opportunities for Editas Medicine and Regeneron Pharmaceuticals
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Editas and Regeneron is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Editas Medicine and Regeneron Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regeneron Pharmaceuticals and Editas Medicine 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 Editas Medicine 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 Editas Medicine i.e., Editas Medicine and Regeneron Pharmaceuticals go up and down completely randomly.
Pair Corralation between Editas Medicine and Regeneron Pharmaceuticals
Given the investment horizon of 90 days Editas Medicine is expected to under-perform the Regeneron Pharmaceuticals. In addition to that, Editas Medicine is 1.81 times more volatile than Regeneron Pharmaceuticals. It trades about -0.33 of its total potential returns per unit of risk. Regeneron Pharmaceuticals is currently generating about -0.39 per unit of volatility. If you would invest 92,279 in Regeneron Pharmaceuticals on August 31, 2024 and sell it today you would lose (16,792) from holding Regeneron Pharmaceuticals or give up 18.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Editas Medicine vs. Regeneron Pharmaceuticals
Performance |
| Timeline |
| Editas Medicine |
| Regeneron Pharmaceuticals |
Editas Medicine and Regeneron Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Editas Medicine and Regeneron Pharmaceuticals
The main advantage of trading using opposite Editas Medicine and Regeneron Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Editas Medicine 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.| Editas Medicine vs. Cue Biopharma | Editas Medicine vs. Tff Pharmaceuticals | Editas Medicine vs. Eliem Therapeutics | Editas Medicine vs. Inhibrx |
| 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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