Correlation Between American Express and Regeneron Pharmaceuticals

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Can any of the company-specific risk be diversified away by investing in both American Express 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 American Express and Regeneron Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and Regeneron Pharmaceuticals, you can compare the effects of market volatilities on American Express 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 American Express with a short position of Regeneron Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and Regeneron Pharmaceuticals.

Diversification Opportunities for American Express and Regeneron Pharmaceuticals

0.83
  Correlation Coefficient

Very poor diversification

The 3 months correlation between American and Regeneron is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding American Express and Regeneron Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regeneron Pharmaceuticals and American Express 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 American Express 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 American Express i.e., American Express and Regeneron Pharmaceuticals go up and down completely randomly.

Pair Corralation between American Express and Regeneron Pharmaceuticals

Considering the 90-day investment horizon American Express is expected to under-perform the Regeneron Pharmaceuticals. In addition to that, American Express is 1.17 times more volatile than Regeneron Pharmaceuticals. It trades about -0.36 of its total potential returns per unit of risk. Regeneron Pharmaceuticals is currently generating about -0.06 per unit of volatility. If you would invest  61,398  in Regeneron Pharmaceuticals on April 8, 2022 and sell it today you would lose (1,908)  from holding Regeneron Pharmaceuticals or give up 3.11% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

American Express  vs.  Regeneron Pharmaceuticals

 Performance (%) 
      Timeline 
American Express 
American Performance
0 of 100
Over the last 90 days American Express has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in August 2022. The recent disarray may also be a sign of long period up-swing for the firm insiders.

Structure and Payout Changes

Forward Annual Dividend Yield
0.0149
Payout Ratio
0.19
Last Split Factor
10000:8753
Forward Annual Dividend Rate
2.08
Dividend Date
2022-08-10
Ex Dividend Date
2022-06-30
Last Split Date
2005-10-03

American Price Channel

Regeneron Pharmaceuticals 
Regeneron Performance
0 of 100
Over the last 90 days Regeneron Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's technical and fundamental indicators remain quite persistent which may send shares a bit higher in August 2022. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Regeneron Price Channel

American Express and Regeneron Pharmaceuticals Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with American Express and Regeneron Pharmaceuticals

The main advantage of trading using opposite American Express and Regeneron Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express 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.

American Express

Pair trading matchups for American Express

The idea behind American Express 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.
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.

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