Correlation Between Aurinia Pharmaceuticals and Regeneron Pharmaceuticals

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

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

Diversification Opportunities for Aurinia Pharmaceuticals and Regeneron Pharmaceuticals

0.18

Correlation Coefficient

Aurinia Pharmaceuticals  Regeneron Pharmaceuticals

Average diversification

The 3 months correlation between Aurinia and Regeneron is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Aurinia Pharmaceuticals and Regeneron Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regeneron Pharmaceuticals and Aurinia 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 Aurinia Pharmaceuticals 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 Aurinia Pharmaceuticals i.e., Aurinia Pharmaceuticals and Regeneron Pharmaceuticals go up and down completely randomly.

Pair Corralation between Aurinia Pharmaceuticals and Regeneron Pharmaceuticals

Given the investment horizon of 90 days Aurinia Pharmaceuticals is expected to generate 1.05 times more return on investment than Regeneron Pharmaceuticals. However, Aurinia Pharmaceuticals is 1.05 times more volatile than Regeneron Pharmaceuticals. It trades about 0.14 of its potential returns per unit of risk. Regeneron Pharmaceuticals is currently generating about 0.03 per unit of risk. If you would invest  812.00  in Aurinia Pharmaceuticals on May 6, 2025 and sell it today you would earn a total of  237.00  from holding Aurinia Pharmaceuticals or generate 29.19% return on investment over 90 days.

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

Aurinia Pharmaceuticals  vs.  Regeneron Pharmaceuticals

Aurinia Pharmaceuticals

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aurinia Pharmaceuticals are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Aurinia Pharmaceuticals demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Regeneron Pharmaceuticals

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Regeneron Pharmaceuticals are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical and fundamental indicators, Regeneron Pharmaceuticals is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Aurinia Pharmaceuticals and Regeneron Pharmaceuticals

The main advantage of trading using opposite Aurinia Pharmaceuticals and Regeneron Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurinia Pharmaceuticals 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 Aurinia Pharmaceuticals 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.