Correlation Between Clever Leaves and Regeneron Pharmaceuticals

Can any of the company-specific risk be diversified away by investing in both Clever Leaves 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 Clever Leaves and Regeneron Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Clever Leaves Holdings and Regeneron Pharmaceuticals, you can compare the effects of market volatilities on Clever Leaves 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 Clever Leaves with a short position of Regeneron Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clever Leaves and Regeneron Pharmaceuticals.

Diversification Opportunities for Clever Leaves and Regeneron Pharmaceuticals

-0.16

Correlation Coefficient

Clever Leaves  Regeneron Pharmaceuticals

Good diversification

The 3 months correlation between Clever and Regeneron is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Clever Leaves Holdings and Regeneron Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regeneron Pharmaceuticals and Clever Leaves 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 Clever Leaves Holdings 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 Clever Leaves i.e., Clever Leaves and Regeneron Pharmaceuticals go up and down completely randomly.

Pair Corralation between Clever Leaves and Regeneron Pharmaceuticals

Assuming the 90 days horizon Clever Leaves Holdings is expected to under-perform the Regeneron Pharmaceuticals. In addition to that, Clever Leaves is 7.46 times more volatile than Regeneron Pharmaceuticals. It trades about -0.11 of its total potential returns per unit of risk. Regeneron Pharmaceuticals is currently generating about -0.41 per unit of volatility. If you would invest  96,249  in Regeneron Pharmaceuticals on January 28, 2024 and sell it today you would lose (7,181) from holding Regeneron Pharmaceuticals or give up 7.46% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Clever Leaves Holdings  vs.  Regeneron Pharmaceuticals

Clever Leaves Holdings

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Clever Leaves Holdings are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Clever Leaves may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Regeneron Pharmaceuticals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Regeneron Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's technical and fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Clever Leaves and Regeneron Pharmaceuticals

The main advantage of trading using opposite Clever Leaves and Regeneron Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clever Leaves 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.

The idea behind Clever Leaves Holdings and Regeneron Pharmaceuticals pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.