Correlation Between Regeneron Pharmaceuticals and TMT Acquisition
Can any of the company-specific risk be diversified away by investing in both Regeneron Pharmaceuticals and TMT Acquisition 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 TMT Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Regeneron Pharmaceuticals and TMT Acquisition Corp, you can compare the effects of market volatilities on Regeneron Pharmaceuticals and TMT Acquisition 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 TMT Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regeneron Pharmaceuticals and TMT Acquisition.
Diversification Opportunities for Regeneron Pharmaceuticals and TMT Acquisition
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Regeneron and TMT is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Regeneron Pharmaceuticals and TMT Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TMT Acquisition 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 TMT Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TMT Acquisition Corp has no effect on the direction of Regeneron Pharmaceuticals i.e., Regeneron Pharmaceuticals and TMT Acquisition go up and down completely randomly.
Pair Corralation between Regeneron Pharmaceuticals and TMT Acquisition
Given the investment horizon of 90 days Regeneron Pharmaceuticals is expected to generate 47.47 times less return on investment than TMT Acquisition. But when comparing it to its historical volatility, Regeneron Pharmaceuticals is 9.17 times less risky than TMT Acquisition. It trades about 0.02 of its potential returns per unit of risk. TMT Acquisition Corp is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 22.00 in TMT Acquisition Corp on September 12, 2024 and sell it today you would earn a total of 16.00 from holding TMT Acquisition Corp or generate 72.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 43.03% |
| Values | Daily Returns |
Regeneron Pharmaceuticals vs. TMT Acquisition Corp
Performance |
| Timeline |
| Regeneron Pharmaceuticals |
| TMT Acquisition Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
Regeneron Pharmaceuticals and TMT Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regeneron Pharmaceuticals and TMT Acquisition
The main advantage of trading using opposite Regeneron Pharmaceuticals and TMT Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regeneron Pharmaceuticals position performs unexpectedly, TMT Acquisition 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 TMT Acquisition will offset losses from the drop in TMT Acquisition'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 |
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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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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