Correlation Between Regeneron Pharmaceuticals and Allient

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

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

Diversification Opportunities for Regeneron Pharmaceuticals and Allient

0.18

Correlation Coefficient

Regeneron Pharmaceuticals  Allient

Average diversification

The 3 months correlation between Regeneron and Allient is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Regeneron Pharmaceuticals and Allient in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allient 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 Allient. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allient has no effect on the direction of Regeneron Pharmaceuticals i.e., Regeneron Pharmaceuticals and Allient go up and down completely randomly.

Pair Corralation between Regeneron Pharmaceuticals and Allient

Given the investment horizon of 90 days Regeneron Pharmaceuticals is expected to generate 0.5 times more return on investment than Allient. However, Regeneron Pharmaceuticals is 2.0 times less risky than Allient. It trades about -0.52 of its potential returns per unit of risk. Allient is currently generating about -0.38 per unit of risk. If you would invest  96,931  in Regeneron Pharmaceuticals on January 29, 2024 and sell it today you would lose (8,611) from holding Regeneron Pharmaceuticals or give up 8.88% of portfolio value over 90 days.

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

Regeneron Pharmaceuticals  vs.  Allient

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 latest weak performance, the Stock's technical and fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Allient

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Allient are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Allient is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Regeneron Pharmaceuticals and Allient

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

The idea behind Regeneron Pharmaceuticals and Allient 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.