Correlation Between Exelixis and Legend Biotech
Can any of the company-specific risk be diversified away by investing in both Exelixis 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 Exelixis and Legend Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Exelixis and Legend Biotech Corp, you can compare the effects of market volatilities on Exelixis 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 Exelixis with a short position of Legend Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exelixis and Legend Biotech.
Diversification Opportunities for Exelixis and Legend Biotech
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Exelixis and Legend is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Exelixis 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 Exelixis 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 Exelixis 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 Exelixis i.e., Exelixis and Legend Biotech go up and down completely randomly.
Pair Corralation between Exelixis and Legend Biotech
Given the investment horizon of 90 days Exelixis is expected to generate 0.66 times more return on investment than Legend Biotech. However, Exelixis is 1.51 times less risky than Legend Biotech. It trades about 0.08 of its potential returns per unit of risk. Legend Biotech Corp is currently generating about -0.01 per unit of risk. If you would invest 1,745 in Exelixis on November 9, 2024 and sell it today you would earn a total of 1,622 from holding Exelixis or generate 92.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Exelixis vs. Legend Biotech Corp
Performance |
| Timeline |
| Exelixis |
| Legend Biotech Corp |
Exelixis and Legend Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exelixis and Legend Biotech
The main advantage of trading using opposite Exelixis and Legend Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exelixis 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.| Exelixis vs. TG Therapeutics | Exelixis vs. Viking Therapeutics | Exelixis vs. Madrigal Pharmaceuticals | Exelixis vs. BioXcel 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |