Correlation Between Regeneron Pharmaceuticals and Synopsys

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

Diversification Opportunities for Regeneron Pharmaceuticals and Synopsys

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Regeneron and Synopsys is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Regeneron Pharmaceuticals and Synopsys in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Synopsys 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 Synopsys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Synopsys has no effect on the direction of Regeneron Pharmaceuticals i.e., Regeneron Pharmaceuticals and Synopsys go up and down completely randomly.

Pair Corralation between Regeneron Pharmaceuticals and Synopsys

Given the investment horizon of 90 days Regeneron Pharmaceuticals is expected to generate 4.54 times less return on investment than Synopsys. But when comparing it to its historical volatility, Regeneron Pharmaceuticals is 2.79 times less risky than Synopsys. It trades about 0.13 of its potential returns per unit of risk. Synopsys is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  29,008  in Synopsys on September 10, 2022 and sell it today you would earn a total of  4,053  from holding Synopsys or generate 13.97% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Regeneron Pharmaceuticals  vs.  Synopsys

 Performance (%) 
       Timeline  
Regeneron Pharmaceuticals 
Regeneron Performance
5 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Regeneron Pharmaceuticals are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite weak technical and fundamental indicators, Regeneron Pharmaceuticals may actually be approaching a critical reversion point that can send shares even higher in January 2023.

Regeneron Price Channel

Synopsys 
Synopsys Performance
0 of 100
Over the last 90 days Synopsys has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Synopsys is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Synopsys Price Channel

Regeneron Pharmaceuticals and Synopsys Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Regeneron Pharmaceuticals and Synopsys

The main advantage of trading using opposite Regeneron Pharmaceuticals and Synopsys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regeneron Pharmaceuticals position performs unexpectedly, Synopsys 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 Synopsys will offset losses from the drop in Synopsys' long position.
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The idea behind Regeneron Pharmaceuticals and Synopsys 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.

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