Correlation Between Regeneron Pharmaceuticals and Emerson Electric
Can any of the company-specific risk be diversified away by investing in both Regeneron Pharmaceuticals and Emerson Electric 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 Regeneron Pharmaceuticals and Emerson Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Regeneron Pharmaceuticals and Emerson Electric, you can compare the effects of market volatilities on Regeneron Pharmaceuticals and Emerson Electric 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 Regeneron Pharmaceuticals with a short position of Emerson Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regeneron Pharmaceuticals and Emerson Electric.
Diversification Opportunities for Regeneron Pharmaceuticals and Emerson Electric
-0.91 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Regeneron and Emerson is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding Regeneron Pharmaceuticals and Emerson Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerson Electric and Regeneron Pharmaceuticals 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 Regeneron Pharmaceuticals are associated (or correlated) with Emerson Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerson Electric has no effect on the direction of Regeneron Pharmaceuticals i.e., Regeneron Pharmaceuticals and Emerson Electric go up and down completely randomly.
Pair Corralation between Regeneron Pharmaceuticals and Emerson Electric
Given the investment horizon of 90 days Regeneron Pharmaceuticals is expected to generate 5.14 times less return on investment than Emerson Electric. But when comparing it to its historical volatility, Regeneron Pharmaceuticals is 1.07 times less risky than Emerson Electric. It trades about 0.01 of its potential returns per unit of risk. Emerson Electric is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 9,265 in Emerson Electric on September 14, 2024 and sell it today you would earn a total of 3,851 from holding Emerson Electric or generate 41.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Regeneron Pharmaceuticals vs. Emerson Electric
Performance |
| Timeline |
| Regeneron Pharmaceuticals |
| Emerson Electric |
Regeneron Pharmaceuticals and Emerson Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regeneron Pharmaceuticals and Emerson Electric
The main advantage of trading using opposite Regeneron Pharmaceuticals and Emerson Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regeneron Pharmaceuticals position performs unexpectedly, Emerson Electric 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 Emerson Electric will offset losses from the drop in Emerson Electric's long position.| Regeneron Pharmaceuticals vs. Crispr Therapeutics AG | Regeneron Pharmaceuticals vs. Novo Nordisk AS | Regeneron Pharmaceuticals vs. Sarepta Therapeutics | Regeneron Pharmaceuticals vs. Intellia Therapeutics |
| Emerson Electric vs. Dover | Emerson Electric vs. Parker Hannifin | Emerson Electric vs. Pentair PLC | Emerson Electric vs. Eaton PLC |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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