Correlation Between Regeneron Pharmaceuticals and CERo Therapeutics

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

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

Diversification Opportunities for Regeneron Pharmaceuticals and CERo Therapeutics

-0.55

Correlation Coefficient

Regeneron Pharmaceuticals  CERo Therapeutics

Excellent diversification

The 3 months correlation between Regeneron and CERo is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Regeneron Pharmaceuticals and CERo Therapeutics Holdings, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CERo Therapeutics 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 CERo Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CERo Therapeutics has no effect on the direction of Regeneron Pharmaceuticals i.e., Regeneron Pharmaceuticals and CERo Therapeutics go up and down completely randomly.

Pair Corralation between Regeneron Pharmaceuticals and CERo Therapeutics

Given the investment horizon of 90 days Regeneron Pharmaceuticals is expected to generate 0.09 times more return on investment than CERo Therapeutics. However, Regeneron Pharmaceuticals is 11.42 times less risky than CERo Therapeutics. It trades about -0.19 of its potential returns per unit of risk. CERo Therapeutics Holdings, is currently generating about -0.22 per unit of risk. If you would invest  78,251  in Regeneron Pharmaceuticals on September 15, 2024 and sell it today you would lose (5,121) from holding Regeneron Pharmaceuticals or give up 6.54% of portfolio value over 90 days.

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

Regeneron Pharmaceuticals  vs.  CERo Therapeutics Holdings,

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 inconsistent performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

CERo Therapeutics

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CERo Therapeutics Holdings, are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile basic indicators, CERo Therapeutics displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Regeneron Pharmaceuticals and CERo Therapeutics

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

The idea behind Regeneron Pharmaceuticals and CERo Therapeutics Holdings, 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.