Correlation Between Legend Biotech and Bionomics
Can any of the company-specific risk be diversified away by investing in both Legend Biotech and Bionomics 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 Bionomics 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 Bionomics Limited, you can compare the effects of market volatilities on Legend Biotech and Bionomics 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 Bionomics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legend Biotech and Bionomics.
Diversification Opportunities for Legend Biotech and Bionomics
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Legend and Bionomics is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Legend Biotech Corp and Bionomics Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bionomics Limited 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 Bionomics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bionomics Limited has no effect on the direction of Legend Biotech i.e., Legend Biotech and Bionomics go up and down completely randomly.
Pair Corralation between Legend Biotech and Bionomics
If you would invest 1.31 in Bionomics Limited on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Bionomics Limited or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Legend Biotech Corp vs. Bionomics Limited
Performance |
| Timeline |
| Legend Biotech Corp |
| Bionomics Limited |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Legend Biotech and Bionomics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Legend Biotech and Bionomics
The main advantage of trading using opposite Legend Biotech and Bionomics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legend Biotech position performs unexpectedly, Bionomics 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 Bionomics will offset losses from the drop in Bionomics' long position.| Legend Biotech vs. Vaxcyte | Legend Biotech vs. Apellis Pharmaceuticals | Legend Biotech vs. Travere Therapeutics | Legend Biotech vs. Akero Therapeutics |
| Bionomics vs. BetterLife Pharma | Bionomics vs. Entheon Biomedical Corp | Bionomics vs. Pharmather Holdings | Bionomics vs. Intelgenx Technologs |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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