Correlation Between Regeneron Pharmaceuticals and DigiAsia Corp
Can any of the company-specific risk be diversified away by investing in both Regeneron Pharmaceuticals and DigiAsia Corp 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 DigiAsia Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Regeneron Pharmaceuticals and DigiAsia Corp, you can compare the effects of market volatilities on Regeneron Pharmaceuticals and DigiAsia Corp 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 DigiAsia Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regeneron Pharmaceuticals and DigiAsia Corp.
Diversification Opportunities for Regeneron Pharmaceuticals and DigiAsia Corp
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Regeneron and DigiAsia is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Regeneron Pharmaceuticals and DigiAsia Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DigiAsia Corp 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 DigiAsia Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DigiAsia Corp has no effect on the direction of Regeneron Pharmaceuticals i.e., Regeneron Pharmaceuticals and DigiAsia Corp go up and down completely randomly.
Pair Corralation between Regeneron Pharmaceuticals and DigiAsia Corp
Given the investment horizon of 90 days Regeneron Pharmaceuticals is expected to under-perform the DigiAsia Corp. But the stock apears to be less risky and, when comparing its historical volatility, Regeneron Pharmaceuticals is 14.06 times less risky than DigiAsia Corp. The stock trades about -0.34 of its potential returns per unit of risk. The DigiAsia Corp is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 9.25 in DigiAsia Corp on September 5, 2024 and sell it today you would lose (1.75) from holding DigiAsia Corp or give up 18.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 81.82% |
| Values | Daily Returns |
Regeneron Pharmaceuticals vs. DigiAsia Corp
Performance |
| Timeline |
| Regeneron Pharmaceuticals |
| DigiAsia Corp |
Regeneron Pharmaceuticals and DigiAsia Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regeneron Pharmaceuticals and DigiAsia Corp
The main advantage of trading using opposite Regeneron Pharmaceuticals and DigiAsia Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regeneron Pharmaceuticals position performs unexpectedly, DigiAsia Corp 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 DigiAsia Corp will offset losses from the drop in DigiAsia Corp's long position.The idea behind Regeneron Pharmaceuticals and DigiAsia Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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