Correlation Between Regeneron Pharmaceuticals and Townsquare Media

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

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

Diversification Opportunities for Regeneron Pharmaceuticals and Townsquare Media

-0.12

Correlation Coefficient

Regeneron Pharmaceuticals  Townsquare Media

Good diversification

The 3 months correlation between Regeneron and Townsquare is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Regeneron Pharmaceuticals and Townsquare Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Townsquare Media 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 Townsquare Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Townsquare Media has no effect on the direction of Regeneron Pharmaceuticals i.e., Regeneron Pharmaceuticals and Townsquare Media go up and down completely randomly.

Pair Corralation between Regeneron Pharmaceuticals and Townsquare Media

Given the investment horizon of 90 days Regeneron Pharmaceuticals is expected to under-perform the Townsquare Media. In addition to that, Regeneron Pharmaceuticals is 1.0 times more volatile than Townsquare Media. It trades about -0.39 of its total potential returns per unit of risk. Townsquare Media is currently generating about 0.01 per unit of volatility. If you would invest  1,004  in Townsquare Media on September 2, 2024 and sell it today you would earn a total of  6.00  from holding Townsquare Media or generate 0.6% return on investment over 90 days.

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

Regeneron Pharmaceuticals  vs.  Townsquare Media

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 January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Townsquare Media

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Townsquare Media are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Townsquare Media is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Regeneron Pharmaceuticals and Townsquare Media

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

The idea behind Regeneron Pharmaceuticals and Townsquare Media 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.

Check out your portfolio center.

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.