Correlation Between Legend Biotech and Azenta
Can any of the company-specific risk be diversified away by investing in both Legend Biotech and Azenta 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 Azenta 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 Azenta Inc, you can compare the effects of market volatilities on Legend Biotech and Azenta 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 Azenta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legend Biotech and Azenta.
Diversification Opportunities for Legend Biotech and Azenta
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Legend and Azenta is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Legend Biotech Corp and Azenta Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Azenta Inc 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 Azenta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Azenta Inc has no effect on the direction of Legend Biotech i.e., Legend Biotech and Azenta go up and down completely randomly.
Pair Corralation between Legend Biotech and Azenta
Given the investment horizon of 90 days Legend Biotech Corp is expected to under-perform the Azenta. But the stock apears to be less risky and, when comparing its historical volatility, Legend Biotech Corp is 1.21 times less risky than Azenta. The stock trades about -0.08 of its potential returns per unit of risk. The Azenta Inc is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 4,191 in Azenta Inc on August 28, 2024 and sell it today you would earn a total of 367.00 from holding Azenta Inc or generate 8.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Legend Biotech Corp vs. Azenta Inc
Performance |
| Timeline |
| Legend Biotech Corp |
| Azenta Inc |
Legend Biotech and Azenta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Legend Biotech and Azenta
The main advantage of trading using opposite Legend Biotech and Azenta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legend Biotech position performs unexpectedly, Azenta 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 Azenta will offset losses from the drop in Azenta's long position.| 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |