Correlation Between Hongli Group and Regeneron Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Hongli Group 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 Hongli Group and Regeneron Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hongli Group Ordinary and Regeneron Pharmaceuticals, you can compare the effects of market volatilities on Hongli Group 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 Hongli Group with a short position of Regeneron Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hongli Group and Regeneron Pharmaceuticals.
Diversification Opportunities for Hongli Group and Regeneron Pharmaceuticals
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hongli and Regeneron is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Hongli Group Ordinary and Regeneron Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regeneron Pharmaceuticals and Hongli Group 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 Hongli Group Ordinary 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 Hongli Group i.e., Hongli Group and Regeneron Pharmaceuticals go up and down completely randomly.
Pair Corralation between Hongli Group and Regeneron Pharmaceuticals
Considering the 90-day investment horizon Hongli Group Ordinary is expected to generate 3.43 times more return on investment than Regeneron Pharmaceuticals. However, Hongli Group is 3.43 times more volatile than Regeneron Pharmaceuticals. It trades about 0.15 of its potential returns per unit of risk. Regeneron Pharmaceuticals is currently generating about -0.18 per unit of risk. If you would invest 123.00 in Hongli Group Ordinary on September 12, 2024 and sell it today you would earn a total of 19.00 from holding Hongli Group Ordinary or generate 15.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Hongli Group Ordinary vs. Regeneron Pharmaceuticals
Performance |
| Timeline |
| Hongli Group Ordinary |
| Regeneron Pharmaceuticals |
Hongli Group and Regeneron Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hongli Group and Regeneron Pharmaceuticals
The main advantage of trading using opposite Hongli Group and Regeneron Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hongli Group 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.| Hongli Group vs. FitLife Brands, Common | Hongli Group vs. Hooker Furniture | Hongli Group vs. Where Food Comes | Hongli Group vs. National Beverage Corp |
| 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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