Correlation Between Cytokinetics and Regeneron Pharmaceuticals

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

Diversification Opportunities for Cytokinetics and Regeneron Pharmaceuticals

0.58
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Cytokinetics and Regeneron is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Cytokinetics and Regeneron Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regeneron Pharmaceuticals and Cytokinetics 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 Cytokinetics 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 Cytokinetics i.e., Cytokinetics and Regeneron Pharmaceuticals go up and down completely randomly.

Pair Corralation between Cytokinetics and Regeneron Pharmaceuticals

Given the investment horizon of 90 days Cytokinetics is expected to generate 2.21 times more return on investment than Regeneron Pharmaceuticals. However, Cytokinetics is 2.21 times more volatile than Regeneron Pharmaceuticals. It trades about 0.07 of its potential returns per unit of risk. Regeneron Pharmaceuticals is currently generating about 0.03 per unit of risk. If you would invest  1,690  in Cytokinetics on July 3, 2022 and sell it today you would earn a total of  3,155  from holding Cytokinetics or generate 186.69% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy99.79%
ValuesDaily Returns

Cytokinetics  vs.  Regeneron Pharmaceuticals

 Performance (%) 
       Timeline  
Cytokinetics 
Cytokinetics Performance
4 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Cytokinetics are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Cytokinetics demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Cytokinetics Price Channel

Regeneron Pharmaceuticals 
Regeneron Performance
6 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Regeneron Pharmaceuticals are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady technical and fundamental indicators, Regeneron Pharmaceuticals disclosed solid returns over the last few months and may actually be approaching a breakup point.

Regeneron Price Channel

Cytokinetics and Regeneron Pharmaceuticals Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Cytokinetics and Regeneron Pharmaceuticals

The main advantage of trading using opposite Cytokinetics and Regeneron Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cytokinetics 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.
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The idea behind Cytokinetics 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.
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.

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