Correlation Between Open Text and Regeneron Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Open Text 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 Open Text and Regeneron Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Open Text Corp and Regeneron Pharmaceuticals, you can compare the effects of market volatilities on Open Text 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 Open Text with a short position of Regeneron Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Open Text and Regeneron Pharmaceuticals.
Diversification Opportunities for Open Text and Regeneron Pharmaceuticals
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Open and Regeneron is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Open Text Corp and Regeneron Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regeneron Pharmaceuticals and Open Text 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 Open Text Corp 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 Open Text i.e., Open Text and Regeneron Pharmaceuticals go up and down completely randomly.
Pair Corralation between Open Text and Regeneron Pharmaceuticals
Given the investment horizon of 90 days Open Text Corp is expected to under-perform the Regeneron Pharmaceuticals. In addition to that, Open Text is 1.4 times more volatile than Regeneron Pharmaceuticals. It trades about -0.36 of its total potential returns per unit of risk. Regeneron Pharmaceuticals is currently generating about -0.35 per unit of volatility. If you would invest 96,355 in Regeneron Pharmaceuticals on January 26, 2024 and sell it today you would lose (5,701) from holding Regeneron Pharmaceuticals or give up 5.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Open Text Corp vs. Regeneron Pharmaceuticals
Performance |
| Timeline |
| Open Text Corp |
| Regeneron Pharmaceuticals |
Open Text and Regeneron Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Open Text and Regeneron Pharmaceuticals
The main advantage of trading using opposite Open Text and Regeneron Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Open Text 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.| Open Text vs. American Software | Open Text vs. Alkami Technology | Open Text vs. Blackbaud | Open Text vs. Enfusion |
| 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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