Correlation Between Regeneron Pharmaceuticals and Pharming Group
Can any of the company-specific risk be diversified away by investing in both Regeneron Pharmaceuticals and Pharming Group 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 Pharming Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Regeneron Pharmaceuticals and Pharming Group NV, you can compare the effects of market volatilities on Regeneron Pharmaceuticals and Pharming Group 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 Pharming Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regeneron Pharmaceuticals and Pharming Group.
Diversification Opportunities for Regeneron Pharmaceuticals and Pharming Group
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Regeneron and Pharming is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Regeneron Pharmaceuticals and Pharming Group NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pharming Group NV 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 Pharming Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pharming Group NV has no effect on the direction of Regeneron Pharmaceuticals i.e., Regeneron Pharmaceuticals and Pharming Group go up and down completely randomly.
Pair Corralation between Regeneron Pharmaceuticals and Pharming Group
Given the investment horizon of 90 days Regeneron Pharmaceuticals is expected to generate 0.62 times more return on investment than Pharming Group. However, Regeneron Pharmaceuticals is 1.61 times less risky than Pharming Group. It trades about 0.01 of its potential returns per unit of risk. Pharming Group NV is currently generating about -0.05 per unit of risk. If you would invest 75,012 in Regeneron Pharmaceuticals on August 31, 2024 and sell it today you would earn a total of 10.00 from holding Regeneron Pharmaceuticals or generate 0.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Regeneron Pharmaceuticals vs. Pharming Group NV
Performance |
| Timeline |
| Regeneron Pharmaceuticals |
| Pharming Group NV |
Regeneron Pharmaceuticals and Pharming Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regeneron Pharmaceuticals and Pharming Group
The main advantage of trading using opposite Regeneron Pharmaceuticals and Pharming Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regeneron Pharmaceuticals position performs unexpectedly, Pharming Group 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 Pharming Group will offset losses from the drop in Pharming Group'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 |
| Pharming Group vs. Rigel Pharmaceuticals | Pharming Group vs. Geron | Pharming Group vs. Verastem | Pharming Group vs. Immutep Ltd ADR |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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