Correlation Between Regeneron Pharmaceuticals and PACIFIC

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

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

Diversification Opportunities for Regeneron Pharmaceuticals and PACIFIC

0.46

Correlation Coefficient

Regeneron Pharmaceuticals  PACIFIC

Very weak diversification

The 3 months correlation between Regeneron and PACIFIC is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Regeneron Pharmaceuticals and PACIFIC GAS ELECTRIC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PACIFIC GAS ELECTRIC 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 PACIFIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PACIFIC GAS ELECTRIC has no effect on the direction of Regeneron Pharmaceuticals i.e., Regeneron Pharmaceuticals and PACIFIC go up and down completely randomly.

Pair Corralation between Regeneron Pharmaceuticals and PACIFIC

Given the investment horizon of 90 days Regeneron Pharmaceuticals is expected to under-perform the PACIFIC. In addition to that, Regeneron Pharmaceuticals is 2.44 times more volatile than PACIFIC GAS ELECTRIC. It trades about -0.38 of its total potential returns per unit of risk. PACIFIC GAS ELECTRIC is currently generating about -0.16 per unit of volatility. If you would invest  9,147  in PACIFIC GAS ELECTRIC on September 23, 2024 and sell it today you would lose (637.00) from holding PACIFIC GAS ELECTRIC or give up 6.96% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	96.92%
Values	Daily Returns

Regeneron Pharmaceuticals  vs.  PACIFIC GAS ELECTRIC

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 unsteady 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.

PACIFIC GAS ELECTRIC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PACIFIC GAS ELECTRIC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for PACIFIC GAS ELECTRIC investors.

Pair Trading with Regeneron Pharmaceuticals and PACIFIC

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

The idea behind Regeneron Pharmaceuticals and PACIFIC GAS ELECTRIC 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..