Correlation Between DiaMedica Therapeutics and Legend Biotech
Can any of the company-specific risk be diversified away by investing in both DiaMedica Therapeutics 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 DiaMedica Therapeutics and Legend Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DiaMedica Therapeutics and Legend Biotech Corp, you can compare the effects of market volatilities on DiaMedica Therapeutics 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 DiaMedica Therapeutics with a short position of Legend Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of DiaMedica Therapeutics and Legend Biotech.
Diversification Opportunities for DiaMedica Therapeutics and Legend Biotech
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between DiaMedica and Legend is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding DiaMedica Therapeutics 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 DiaMedica Therapeutics 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 DiaMedica Therapeutics 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 DiaMedica Therapeutics i.e., DiaMedica Therapeutics and Legend Biotech go up and down completely randomly.
Pair Corralation between DiaMedica Therapeutics and Legend Biotech
Given the investment horizon of 90 days DiaMedica Therapeutics is expected to generate 1.09 times less return on investment than Legend Biotech. In addition to that, DiaMedica Therapeutics is 1.12 times more volatile than Legend Biotech Corp. It trades about 0.1 of its total potential returns per unit of risk. Legend Biotech Corp is currently generating about 0.13 per unit of volatility. If you would invest 3,473 in Legend Biotech Corp on November 2, 2024 and sell it today you would earn a total of 249.00 from holding Legend Biotech Corp or generate 7.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DiaMedica Therapeutics vs. Legend Biotech Corp
Performance |
| Timeline |
| DiaMedica Therapeutics |
| Legend Biotech Corp |
DiaMedica Therapeutics and Legend Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DiaMedica Therapeutics and Legend Biotech
The main advantage of trading using opposite DiaMedica Therapeutics and Legend Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DiaMedica Therapeutics 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.| DiaMedica Therapeutics vs. Milestone Pharmaceuticals | DiaMedica Therapeutics vs. Seres Therapeutics | DiaMedica Therapeutics vs. Inhibikase Therapeutics | DiaMedica Therapeutics vs. Oncolytics Biotech |
| 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |