Correlation Between Hookipa Pharma and Legend Biotech
Can any of the company-specific risk be diversified away by investing in both Hookipa Pharma 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 Hookipa Pharma and Legend Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hookipa Pharma and Legend Biotech Corp, you can compare the effects of market volatilities on Hookipa Pharma 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 Hookipa Pharma with a short position of Legend Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hookipa Pharma and Legend Biotech.
Diversification Opportunities for Hookipa Pharma and Legend Biotech
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hookipa and Legend is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Hookipa Pharma 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 Hookipa Pharma 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 Hookipa Pharma 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 Hookipa Pharma i.e., Hookipa Pharma and Legend Biotech go up and down completely randomly.
Pair Corralation between Hookipa Pharma and Legend Biotech
Given the investment horizon of 90 days Hookipa Pharma is expected to under-perform the Legend Biotech. In addition to that, Hookipa Pharma is 1.15 times more volatile than Legend Biotech Corp. It trades about -0.32 of its total potential returns per unit of risk. Legend Biotech Corp is currently generating about -0.12 per unit of volatility. If you would invest 5,666 in Legend Biotech Corp on August 28, 2024 and sell it today you would lose (1,397) from holding Legend Biotech Corp or give up 24.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hookipa Pharma vs. Legend Biotech Corp
Performance |
| Timeline |
| Hookipa Pharma |
| Legend Biotech Corp |
Hookipa Pharma and Legend Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hookipa Pharma and Legend Biotech
The main advantage of trading using opposite Hookipa Pharma and Legend Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hookipa Pharma 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.| Hookipa Pharma vs. Mereo BioPharma Group | Hookipa Pharma vs. Terns Pharmaceuticals | Hookipa Pharma vs. PDS Biotechnology Corp | Hookipa Pharma vs. Inozyme Pharma |
| Legend Biotech vs. Eliem Therapeutics | Legend Biotech vs. HCW Biologics | Legend Biotech vs. Scpharmaceuticals | Legend Biotech vs. Milestone Pharmaceuticals |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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