Correlation Between Summit Therapeutics and Regeneron Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Summit Therapeutics and Regeneron Pharmaceuticals 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 Summit Therapeutics and Regeneron Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Summit Therapeutics PLC and Regeneron Pharmaceuticals, you can compare the effects of market volatilities on Summit Therapeutics and Regeneron Pharmaceuticals 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 Summit Therapeutics with a short position of Regeneron Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Therapeutics and Regeneron Pharmaceuticals.
Diversification Opportunities for Summit Therapeutics and Regeneron Pharmaceuticals
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Summit and Regeneron is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Summit Therapeutics PLC and Regeneron Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regeneron Pharmaceuticals and Summit Therapeutics 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 Summit Therapeutics PLC are associated (or correlated) with Regeneron Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regeneron Pharmaceuticals has no effect on the direction of Summit Therapeutics i.e., Summit Therapeutics and Regeneron Pharmaceuticals go up and down completely randomly.
Pair Corralation between Summit Therapeutics and Regeneron Pharmaceuticals
Given the investment horizon of 90 days Summit Therapeutics PLC is expected to generate 14.36 times more return on investment than Regeneron Pharmaceuticals. However, Summit Therapeutics is 14.36 times more volatile than Regeneron Pharmaceuticals. It trades about 0.09 of its potential returns per unit of risk. Regeneron Pharmaceuticals is currently generating about -0.07 per unit of risk. If you would invest 366.00 in Summit Therapeutics PLC on October 12, 2024 and sell it today you would earn a total of 1,516 from holding Summit Therapeutics PLC or generate 414.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Summit Therapeutics PLC vs. Regeneron Pharmaceuticals
Performance |
| Timeline |
| Summit Therapeutics PLC |
| Regeneron Pharmaceuticals |
Summit Therapeutics and Regeneron Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summit Therapeutics and Regeneron Pharmaceuticals
The main advantage of trading using opposite Summit Therapeutics and Regeneron Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Therapeutics position performs unexpectedly, Regeneron Pharmaceuticals 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 Regeneron Pharmaceuticals will offset losses from the drop in Regeneron Pharmaceuticals' long position.| Summit Therapeutics vs. Nkarta Inc | Summit Therapeutics vs. Cullinan Oncology LLC | Summit Therapeutics vs. Kezar Life Sciences | Summit Therapeutics vs. Kronos Bio |
| Regeneron Pharmaceuticals vs. Crispr Therapeutics AG | Regeneron Pharmaceuticals vs. Novo Nordisk AS | Regeneron Pharmaceuticals vs. Sarepta Therapeutics | Regeneron Pharmaceuticals vs. Intellia Therapeutics |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |