Correlation Between Agios Pharm and Legend Biotech
Can any of the company-specific risk be diversified away by investing in both Agios Pharm 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 Agios Pharm and Legend Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agios Pharm and Legend Biotech Corp, you can compare the effects of market volatilities on Agios Pharm 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 Agios Pharm with a short position of Legend Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agios Pharm and Legend Biotech.
Diversification Opportunities for Agios Pharm and Legend Biotech
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Agios and Legend is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Agios Pharm 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 Agios Pharm 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 Agios Pharm 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 Agios Pharm i.e., Agios Pharm and Legend Biotech go up and down completely randomly.
Pair Corralation between Agios Pharm and Legend Biotech
Given the investment horizon of 90 days Agios Pharm is expected to generate 1.47 times more return on investment than Legend Biotech. However, Agios Pharm is 1.47 times more volatile than Legend Biotech Corp. It trades about 0.29 of its potential returns per unit of risk. Legend Biotech Corp is currently generating about -0.17 per unit of risk. If you would invest 4,433 in Agios Pharm on August 24, 2024 and sell it today you would earn a total of 1,121 from holding Agios Pharm or generate 25.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Agios Pharm vs. Legend Biotech Corp
Performance |
| Timeline |
| Agios Pharm |
| Legend Biotech Corp |
Agios Pharm and Legend Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agios Pharm and Legend Biotech
The main advantage of trading using opposite Agios Pharm and Legend Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agios Pharm 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.| Agios Pharm vs. Mereo BioPharma Group | Agios Pharm vs. Blueprint Medicines Corp | Agios Pharm vs. Day One Biopharmaceuticals | Agios Pharm vs. Biomarin Pharmaceutical |
| Legend Biotech vs. ZyVersa Therapeutics | Legend Biotech vs. Sonnet Biotherapeutics Holdings | Legend Biotech vs. Zura Bio Limited | Legend Biotech vs. Phio Pharmaceuticals Corp |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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