Correlation Between Regeneron Pharmaceuticals and WuXi Biologics
Can any of the company-specific risk be diversified away by investing in both Regeneron Pharmaceuticals and WuXi Biologics 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 WuXi Biologics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Regeneron Pharmaceuticals and WuXi Biologics, you can compare the effects of market volatilities on Regeneron Pharmaceuticals and WuXi Biologics 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 WuXi Biologics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regeneron Pharmaceuticals and WuXi Biologics.
Diversification Opportunities for Regeneron Pharmaceuticals and WuXi Biologics
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Regeneron and WuXi is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Regeneron Pharmaceuticals and WuXi Biologics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WuXi Biologics 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 WuXi Biologics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WuXi Biologics has no effect on the direction of Regeneron Pharmaceuticals i.e., Regeneron Pharmaceuticals and WuXi Biologics go up and down completely randomly.
Pair Corralation between Regeneron Pharmaceuticals and WuXi Biologics
Given the investment horizon of 90 days Regeneron Pharmaceuticals is expected to under-perform the WuXi Biologics. But the stock apears to be less risky and, when comparing its historical volatility, Regeneron Pharmaceuticals is 2.96 times less risky than WuXi Biologics. The stock trades about -0.11 of its potential returns per unit of risk. The WuXi Biologics is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 372.00 in WuXi Biologics on September 3, 2024 and sell it today you would earn a total of 4.00 from holding WuXi Biologics or generate 1.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Regeneron Pharmaceuticals vs. WuXi Biologics
Performance |
| Timeline |
| Regeneron Pharmaceuticals |
| WuXi Biologics |
Regeneron Pharmaceuticals and WuXi Biologics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regeneron Pharmaceuticals and WuXi Biologics
The main advantage of trading using opposite Regeneron Pharmaceuticals and WuXi Biologics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regeneron Pharmaceuticals position performs unexpectedly, WuXi Biologics 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 WuXi Biologics will offset losses from the drop in WuXi Biologics' long position.| Regeneron Pharmaceuticals vs. DiaMedica Therapeutics | Regeneron Pharmaceuticals vs. Lyra Therapeutics | Regeneron Pharmaceuticals vs. Centessa Pharmaceuticals PLC |
| WuXi Biologics vs. Inhibikase Therapeutics | WuXi Biologics vs. Corcept Therapeutics Incorporated | WuXi Biologics vs. Cardio Diagnostics Holdings | WuXi Biologics vs. Revolution Medicines |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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