Correlation Between Regeneron Pharmaceuticals and Biogen
Can any of the company-specific risk be diversified away by investing in both Regeneron Pharmaceuticals 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 Regeneron Pharmaceuticals and Biogen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Regeneron Pharmaceuticals and Biogen Inc, you can compare the effects of market volatilities on Regeneron Pharmaceuticals 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 Regeneron Pharmaceuticals with a short position of Biogen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regeneron Pharmaceuticals and Biogen.
Diversification Opportunities for Regeneron Pharmaceuticals and Biogen
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Regeneron and Biogen is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Regeneron Pharmaceuticals and Biogen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biogen Inc 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 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 Regeneron Pharmaceuticals i.e., Regeneron Pharmaceuticals and Biogen go up and down completely randomly.
Pair Corralation between Regeneron Pharmaceuticals and Biogen
Given the investment horizon of 90 days Regeneron Pharmaceuticals is expected to generate 0.5 times more return on investment than Biogen. However, Regeneron Pharmaceuticals is 2.0 times less risky than Biogen. It trades about -0.32 of its potential returns per unit of risk. Biogen Inc is currently generating about -0.21 per unit of risk. If you would invest 96,109 in Regeneron Pharmaceuticals on January 25, 2024 and sell it today you would lose (5,377) from holding Regeneron Pharmaceuticals or give up 5.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Regeneron Pharmaceuticals vs. Biogen Inc
Performance |
| Timeline |
| Regeneron Pharmaceuticals |
| Biogen Inc |
Regeneron Pharmaceuticals and Biogen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regeneron Pharmaceuticals and Biogen
The main advantage of trading using opposite Regeneron Pharmaceuticals and Biogen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regeneron Pharmaceuticals 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.| Regeneron Pharmaceuticals vs. Crispr Therapeutics AG | Regeneron Pharmaceuticals vs. Novo Nordisk AS | Regeneron Pharmaceuticals vs. Sarepta Therapeutics | Regeneron Pharmaceuticals vs. Intellia Therapeutics |
| 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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