Correlation Between Reata Pharmaceuticals and Regeneron Pharmaceuticals

Can any of the company-specific risk be diversified away by investing in both Reata 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 Reata 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 Reata Pharmaceuticals and Regeneron Pharmaceuticals, you can compare the effects of market volatilities on Reata 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 Reata Pharmaceuticals with a short position of Regeneron Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Reata Pharmaceuticals and Regeneron Pharmaceuticals.

Diversification Opportunities for Reata Pharmaceuticals and Regeneron Pharmaceuticals

0.0

Correlation Coefficient

Reata Pharmaceuticals  Regeneron Pharmaceuticals

Pay attention - limited upside

The 3 months correlation between Reata and Regeneron is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Reata Pharmaceuticals and Regeneron Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regeneron Pharmaceuticals and Reata 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 Reata 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 Reata Pharmaceuticals i.e., Reata Pharmaceuticals and Regeneron Pharmaceuticals go up and down completely randomly.

Pair Corralation between Reata Pharmaceuticals and Regeneron Pharmaceuticals

If you would invest  56,010  in Regeneron Pharmaceuticals on May 7, 2025 and sell it today you would earn a total of  1,144  from holding Regeneron Pharmaceuticals or generate 2.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Reata Pharmaceuticals  vs.  Regeneron Pharmaceuticals

Reata Pharmaceuticals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Reata Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Reata Pharmaceuticals is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

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 Reata Pharmaceuticals and Regeneron Pharmaceuticals

The main advantage of trading using opposite Reata Pharmaceuticals and Regeneron Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Reata 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 Reata 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.