Correlation Between Regeneron Pharmaceuticals and Perrigo Company
Can any of the company-specific risk be diversified away by investing in both Regeneron Pharmaceuticals and Perrigo Company 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 Perrigo Company into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Regeneron Pharmaceuticals and Perrigo Company PLC, you can compare the effects of market volatilities on Regeneron Pharmaceuticals and Perrigo Company 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 Perrigo Company. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regeneron Pharmaceuticals and Perrigo Company.
Diversification Opportunities for Regeneron Pharmaceuticals and Perrigo Company
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Regeneron and Perrigo is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Regeneron Pharmaceuticals and Perrigo Company PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perrigo Company 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 Perrigo Company. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perrigo Company has no effect on the direction of Regeneron Pharmaceuticals i.e., Regeneron Pharmaceuticals and Perrigo Company go up and down completely randomly.
Pair Corralation between Regeneron Pharmaceuticals and Perrigo Company
Given the investment horizon of 90 days Regeneron Pharmaceuticals is expected to under-perform the Perrigo Company. But the stock apears to be less risky and, when comparing its historical volatility, Regeneron Pharmaceuticals is 1.96 times less risky than Perrigo Company. The stock trades about -0.32 of its potential returns per unit of risk. The Perrigo Company PLC is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 3,101 in Perrigo Company PLC on January 25, 2024 and sell it today you would lose (52.00) from holding Perrigo Company PLC or give up 1.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Regeneron Pharmaceuticals vs. Perrigo Company PLC
Performance |
| Timeline |
| Regeneron Pharmaceuticals |
| Perrigo Company |
Regeneron Pharmaceuticals and Perrigo Company Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regeneron Pharmaceuticals and Perrigo Company
The main advantage of trading using opposite Regeneron Pharmaceuticals and Perrigo Company positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regeneron Pharmaceuticals position performs unexpectedly, Perrigo Company 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 Perrigo Company will offset losses from the drop in Perrigo Company'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 |
| Perrigo Company vs. Prestige Brand Holdings | Perrigo Company vs. Amphastar P | Perrigo Company vs. Deciphera Pharmaceuticals LLC | Perrigo Company vs. Pacira Pharmaceuticals |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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