Correlation Between Sanofi ADR and Biogen
Can any of the company-specific risk be diversified away by investing in both Sanofi ADR and Biogen 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 Sanofi ADR and Biogen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sanofi ADR and Biogen Inc, you can compare the effects of market volatilities on Sanofi ADR and Biogen 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 Sanofi ADR with a short position of Biogen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sanofi ADR and Biogen.
Diversification Opportunities for Sanofi ADR and Biogen
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Sanofi and Biogen is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Sanofi ADR and Biogen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biogen Inc and Sanofi ADR 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 Sanofi ADR are associated (or correlated) with Biogen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biogen Inc has no effect on the direction of Sanofi ADR i.e., Sanofi ADR and Biogen go up and down completely randomly.
Pair Corralation between Sanofi ADR and Biogen
Considering the 90-day investment horizon Sanofi ADR is expected to generate 1.03 times more return on investment than Biogen. However, Sanofi ADR is 1.03 times more volatile than Biogen Inc. It trades about 0.01 of its potential returns per unit of risk. Biogen Inc is currently generating about -0.07 per unit of risk. If you would invest 4,633 in Sanofi ADR on August 28, 2024 and sell it today you would earn a total of 195.00 from holding Sanofi ADR or generate 4.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sanofi ADR vs. Biogen Inc
Performance |
| Timeline |
| Sanofi ADR |
| Biogen Inc |
Sanofi ADR and Biogen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sanofi ADR and Biogen
The main advantage of trading using opposite Sanofi ADR and Biogen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sanofi ADR position performs unexpectedly, Biogen 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 Biogen will offset losses from the drop in Biogen's long position.| Sanofi ADR vs. AstraZeneca PLC ADR | Sanofi ADR vs. Roche Holding Ltd | Sanofi ADR vs. GlaxoSmithKline PLC ADR | Sanofi ADR vs. Merck Company |
| Biogen vs. Bristol Myers Squibb | Biogen vs. AbbVie Inc | Biogen vs. Merck Company | Biogen vs. Gilead Sciences |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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