Correlation Between Legend Biotech and Ascendis Pharma
Can any of the company-specific risk be diversified away by investing in both Legend Biotech and Ascendis Pharma 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 Legend Biotech and Ascendis Pharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Legend Biotech Corp and Ascendis Pharma AS, you can compare the effects of market volatilities on Legend Biotech and Ascendis Pharma 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 Legend Biotech with a short position of Ascendis Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legend Biotech and Ascendis Pharma.
Diversification Opportunities for Legend Biotech and Ascendis Pharma
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Legend and Ascendis is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Legend Biotech Corp and Ascendis Pharma AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ascendis Pharma AS and Legend Biotech 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 Legend Biotech Corp are associated (or correlated) with Ascendis Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ascendis Pharma AS has no effect on the direction of Legend Biotech i.e., Legend Biotech and Ascendis Pharma go up and down completely randomly.
Pair Corralation between Legend Biotech and Ascendis Pharma
Given the investment horizon of 90 days Legend Biotech Corp is expected to under-perform the Ascendis Pharma. In addition to that, Legend Biotech is 1.26 times more volatile than Ascendis Pharma AS. It trades about -0.09 of its total potential returns per unit of risk. Ascendis Pharma AS is currently generating about 0.03 per unit of volatility. If you would invest 12,944 in Ascendis Pharma AS on August 28, 2024 and sell it today you would earn a total of 141.00 from holding Ascendis Pharma AS or generate 1.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Legend Biotech Corp vs. Ascendis Pharma AS
Performance |
| Timeline |
| Legend Biotech Corp |
| Ascendis Pharma AS |
Legend Biotech and Ascendis Pharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Legend Biotech and Ascendis Pharma
The main advantage of trading using opposite Legend Biotech and Ascendis Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legend Biotech position performs unexpectedly, Ascendis Pharma 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 Ascendis Pharma will offset losses from the drop in Ascendis Pharma's long position.| Legend Biotech vs. Eliem Therapeutics | Legend Biotech vs. HCW Biologics | Legend Biotech vs. Scpharmaceuticals | Legend Biotech vs. Milestone Pharmaceuticals |
| Ascendis Pharma vs. Eliem Therapeutics | Ascendis Pharma vs. HCW Biologics | Ascendis Pharma vs. Scpharmaceuticals | Ascendis Pharma 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |