Correlation Between Crispr Therapeutics and Regeneron Pharmaceuticals

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

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

Diversification Opportunities for Crispr Therapeutics and Regeneron Pharmaceuticals

0.68

Correlation Coefficient

Crispr Therapeutics  Regeneron Pharmaceuticals

Poor diversification

The 3 months correlation between Crispr and Regeneron is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Crispr Therapeutics AG and Regeneron Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regeneron Pharmaceuticals and Crispr Therapeutics 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 Crispr Therapeutics AG 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 Crispr Therapeutics i.e., Crispr Therapeutics and Regeneron Pharmaceuticals go up and down completely randomly.

Pair Corralation between Crispr Therapeutics and Regeneron Pharmaceuticals

Given the investment horizon of 90 days Crispr Therapeutics AG is expected to under-perform the Regeneron Pharmaceuticals. In addition to that, Crispr Therapeutics is 2.16 times more volatile than Regeneron Pharmaceuticals. It trades about 0.0 of its total potential returns per unit of risk. Regeneron Pharmaceuticals is currently generating about 0.07 per unit of volatility. If you would invest  58,728  in Regeneron Pharmaceuticals on February 13, 2024 and sell it today you would earn a total of  38,652  from holding Regeneron Pharmaceuticals or generate 65.82% return on investment over 90 days.

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

Crispr Therapeutics AG  vs.  Regeneron Pharmaceuticals

Crispr Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Crispr Therapeutics AG has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in June 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Regeneron Pharmaceuticals

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Regeneron Pharmaceuticals are ranked lower than 4 (%) 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 Crispr Therapeutics and Regeneron Pharmaceuticals

The main advantage of trading using opposite Crispr Therapeutics and Regeneron Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crispr Therapeutics 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 Crispr Therapeutics AG 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.