Correlation Between Regeneron Pharmaceuticals and Perrigo

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

Diversification Opportunities for Regeneron Pharmaceuticals and Perrigo

-0.28
  Correlation Coefficient

Very good diversification

The 3 months correlation between Regeneron and Perrigo is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Regeneron Pharmaceuticals and Perrigo Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perrigo Company 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 Perrigo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perrigo Company has no effect on the direction of Regeneron Pharmaceuticals i.e., Regeneron Pharmaceuticals and Perrigo go up and down completely randomly.

Pair Corralation between Regeneron Pharmaceuticals and Perrigo

Given the investment horizon of 90 days Regeneron Pharmaceuticals is expected to under-perform the Perrigo. In addition to that, Regeneron Pharmaceuticals is 1.13 times more volatile than Perrigo Company. It trades about -0.08 of its total potential returns per unit of risk. Perrigo Company is currently generating about 0.26 per unit of volatility. If you would invest  3,322  in Perrigo Company on April 2, 2022 and sell it today you would earn a total of  780.00  from holding Perrigo Company or generate 23.48% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Regeneron Pharmaceuticals  vs.  Perrigo Company

 Performance (%) 
      Timeline 
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

Perrigo Company 
Perrigo Performance
6 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Perrigo Company are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady technical and fundamental indicators, Perrigo may actually be approaching a critical reversion point that can send shares even higher in August 2022.

Perrigo Price Channel

Regeneron Pharmaceuticals and Perrigo Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Regeneron Pharmaceuticals and Perrigo

The main advantage of trading using opposite Regeneron Pharmaceuticals and Perrigo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regeneron Pharmaceuticals position performs unexpectedly, Perrigo 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 Perrigo will offset losses from the drop in Perrigo's long position.
The idea behind Regeneron Pharmaceuticals and Perrigo Company 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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