Correlation Between Regeneron Pharmaceuticals and Ascletis Pharma

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

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

Diversification Opportunities for Regeneron Pharmaceuticals and Ascletis Pharma

-0.67

Correlation Coefficient

Regeneron Pharmaceuticals  Ascletis Pharma

Excellent diversification

The 3 months correlation between Regeneron and Ascletis is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Regeneron Pharmaceuticals and Ascletis Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ascletis Pharma 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 Ascletis Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ascletis Pharma has no effect on the direction of Regeneron Pharmaceuticals i.e., Regeneron Pharmaceuticals and Ascletis Pharma go up and down completely randomly.

Pair Corralation between Regeneron Pharmaceuticals and Ascletis Pharma

Given the investment horizon of 90 days Regeneron Pharmaceuticals is expected to under-perform the Ascletis Pharma. But the stock apears to be less risky and, when comparing its historical volatility, Regeneron Pharmaceuticals is 1.2 times less risky than Ascletis Pharma. The stock trades about -0.54 of its potential returns per unit of risk. The Ascletis Pharma is currently generating about -0.21 of returns per unit of risk over similar time horizon. If you would invest  17.00  in Ascletis Pharma on August 1, 2024 and sell it today you would lose (1.00) from holding Ascletis Pharma or give up 5.88% of portfolio value over 90 days.

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

Regeneron Pharmaceuticals  vs.  Ascletis Pharma

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 weak performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in November 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Ascletis Pharma

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ascletis Pharma are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile essential indicators, Ascletis Pharma may actually be approaching a critical reversion point that can send shares even higher in November 2024.

Pair Trading with Regeneron Pharmaceuticals and Ascletis Pharma

The main advantage of trading using opposite Regeneron Pharmaceuticals and Ascletis Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regeneron Pharmaceuticals position performs unexpectedly, Ascletis Pharma 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 Ascletis Pharma will offset losses from the drop in Ascletis Pharma's long position.

The idea behind Regeneron Pharmaceuticals and Ascletis Pharma 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.