Correlation Between Pfizer and Regeneron Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Pfizer 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 Pfizer and Regeneron Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pfizer Inc and Regeneron Pharmaceuticals, you can compare the effects of market volatilities on Pfizer 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 Pfizer with a short position of Regeneron Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pfizer and Regeneron Pharmaceuticals.
Diversification Opportunities for Pfizer and Regeneron Pharmaceuticals
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Pfizer and Regeneron is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and Regeneron Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regeneron Pharmaceuticals and Pfizer 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 Pfizer Inc 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 Pfizer i.e., Pfizer and Regeneron Pharmaceuticals go up and down completely randomly.
Pair Corralation between Pfizer and Regeneron Pharmaceuticals
Considering the 90-day investment horizon Pfizer Inc is expected to generate 0.38 times more return on investment than Regeneron Pharmaceuticals. However, Pfizer Inc is 2.65 times less risky than Regeneron Pharmaceuticals. It trades about -0.12 of its potential returns per unit of risk. Regeneron Pharmaceuticals is currently generating about -0.13 per unit of risk. If you would invest 2,671 in Pfizer Inc on October 24, 2024 and sell it today you would lose (41.00) from holding Pfizer Inc or give up 1.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pfizer Inc vs. Regeneron Pharmaceuticals
Performance |
| Timeline |
| Pfizer Inc |
| Regeneron Pharmaceuticals |
Pfizer and Regeneron Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pfizer and Regeneron Pharmaceuticals
The main advantage of trading using opposite Pfizer and Regeneron Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pfizer 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.| Pfizer vs. DiaMedica Therapeutics | Pfizer vs. Seres Therapeutics | Pfizer vs. Inhibikase Therapeutics | Pfizer vs. Oncolytics Biotech |
| 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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