Correlation Between Agenus and Legend Biotech
Can any of the company-specific risk be diversified away by investing in both Agenus and Legend Biotech 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 Agenus and Legend Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agenus Inc and Legend Biotech Corp, you can compare the effects of market volatilities on Agenus and Legend Biotech 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 Agenus with a short position of Legend Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agenus and Legend Biotech.
Diversification Opportunities for Agenus and Legend Biotech
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Agenus and Legend is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Agenus Inc and Legend Biotech Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Legend Biotech Corp and Agenus 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 Agenus Inc are associated (or correlated) with Legend Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Legend Biotech Corp has no effect on the direction of Agenus i.e., Agenus and Legend Biotech go up and down completely randomly.
Pair Corralation between Agenus and Legend Biotech
Given the investment horizon of 90 days Agenus Inc is expected to under-perform the Legend Biotech. In addition to that, Agenus is 2.74 times more volatile than Legend Biotech Corp. It trades about -0.03 of its total potential returns per unit of risk. Legend Biotech Corp is currently generating about -0.04 per unit of volatility. If you would invest 6,142 in Legend Biotech Corp on September 2, 2024 and sell it today you would lose (1,935) from holding Legend Biotech Corp or give up 31.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Agenus Inc vs. Legend Biotech Corp
Performance |
| Timeline |
| Agenus Inc |
| Legend Biotech Corp |
Agenus and Legend Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agenus and Legend Biotech
The main advantage of trading using opposite Agenus and Legend Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agenus position performs unexpectedly, Legend Biotech 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 Legend Biotech will offset losses from the drop in Legend Biotech's long position.| Agenus vs. Tff Pharmaceuticals | Agenus vs. Eliem Therapeutics | Agenus vs. Inhibrx | Agenus vs. Enliven Therapeutics |
| Legend Biotech vs. Vaxcyte | Legend Biotech vs. Apellis Pharmaceuticals | Legend Biotech vs. Travere Therapeutics | Legend Biotech vs. Akero Therapeutics |
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 the ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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