Correlation Between Regeneron Pharmaceuticals and Cassava Sciences

By analyzing existing cross correlation between Regeneron Pharmaceuticals and Cassava Sciences, you can compare the effects of market volatilities on Regeneron Pharmaceuticals and Cassava Sciences 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 Cassava Sciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regeneron Pharmaceuticals and Cassava Sciences.

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

Diversification Opportunities for Regeneron Pharmaceuticals and Cassava Sciences

-0.01
  Correlation Coefficient
Regeneron Pharmaceuticals
Cassava Sciences

Good diversification

The 3 months correlation between Regeneron and Cassava is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Regeneron Pharmaceuticals and Cassava Sciences in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Cassava Sciences 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 Cassava Sciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cassava Sciences has no effect on the direction of Regeneron Pharmaceuticals i.e., Regeneron Pharmaceuticals and Cassava Sciences go up and down completely randomly.

Pair Corralation between Regeneron Pharmaceuticals and Cassava Sciences

Given the investment horizon of 90 days Regeneron Pharmaceuticals is expected to generate 22.81 times less return on investment than Cassava Sciences. But when comparing it to its historical volatility, Regeneron Pharmaceuticals is 13.08 times less risky than Cassava Sciences. It trades about 0.06 of its potential returns per unit of risk. Cassava Sciences is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  129.00  in Cassava Sciences on July 24, 2021 and sell it today you would earn a total of  4,527  from holding Cassava Sciences or generate 3509.3% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy99.6%
ValuesDaily Returns

Regeneron Pharmaceuticals  vs.  Cassava Sciences

 Performance (%) 
      Timeline 
Regeneron Pharmaceuticals 
 Regeneron Performance
0 of 100
Over the last 90 days Regeneron Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent technical and fundamental indicators, Regeneron Pharmaceuticals is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Regeneron Price Channel

Cassava Sciences 
 Cassava Performance
0 of 100
Over the last 90 days Cassava Sciences has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in November 2021. The current disturbance may also be a sign of long term up-swing for the company investors.

Cassava Price Channel

Regeneron Pharmaceuticals and Cassava Sciences Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Regeneron Pharmaceuticals and Cassava Sciences

The main advantage of trading using opposite Regeneron Pharmaceuticals and Cassava Sciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regeneron Pharmaceuticals position performs unexpectedly, Cassava Sciences 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 Cassava Sciences will offset losses from the drop in Cassava Sciences' long position.
The idea behind Regeneron Pharmaceuticals and Cassava Sciences 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.
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.

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