Correlation Between Viavi Solutions and Regeneron Pharmaceuticals

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

Diversification Opportunities for Viavi Solutions and Regeneron Pharmaceuticals

-0.31
  Correlation Coefficient

Very good diversification

The 3 months correlation between Viavi and Regeneron is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Viavi Solutions and Regeneron Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regeneron Pharmaceuticals and Viavi Solutions 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 Viavi Solutions 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 Viavi Solutions i.e., Viavi Solutions and Regeneron Pharmaceuticals go up and down completely randomly.

Pair Corralation between Viavi Solutions and Regeneron Pharmaceuticals

Given the investment horizon of 90 days Viavi Solutions is expected to under-perform the Regeneron Pharmaceuticals. In addition to that, Viavi Solutions is 4.38 times more volatile than Regeneron Pharmaceuticals. It trades about -0.21 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  72,488  in Regeneron Pharmaceuticals on August 28, 2022 and sell it today you would earn a total of  1,135  from holding Regeneron Pharmaceuticals or generate 1.57% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy95.45%
ValuesDaily Returns

Viavi Solutions  vs.  Regeneron Pharmaceuticals

 Performance (%) 
       Timeline  
Viavi Solutions 
Viavi Performance
0 of 100
Over the last 90 days Viavi Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in December 2022. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Viavi Price Channel

Regeneron Pharmaceuticals 
Regeneron Performance
9 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Regeneron Pharmaceuticals are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite sluggish 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

Viavi Solutions and Regeneron Pharmaceuticals Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Viavi Solutions and Regeneron Pharmaceuticals

The main advantage of trading using opposite Viavi Solutions and Regeneron Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Viavi Solutions 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 Viavi Solutions 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.

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