Correlation Between Legend Biotech and Elicio Therapeutics
Can any of the company-specific risk be diversified away by investing in both Legend Biotech and Elicio Therapeutics 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 Elicio Therapeutics 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 Elicio Therapeutics, you can compare the effects of market volatilities on Legend Biotech and Elicio Therapeutics 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 Elicio Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legend Biotech and Elicio Therapeutics.
Diversification Opportunities for Legend Biotech and Elicio Therapeutics
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Legend and Elicio is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Legend Biotech Corp and Elicio Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elicio Therapeutics 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 Elicio Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elicio Therapeutics has no effect on the direction of Legend Biotech i.e., Legend Biotech and Elicio Therapeutics go up and down completely randomly.
Pair Corralation between Legend Biotech and Elicio Therapeutics
Given the investment horizon of 90 days Legend Biotech Corp is expected to under-perform the Elicio Therapeutics. But the stock apears to be less risky and, when comparing its historical volatility, Legend Biotech Corp is 1.38 times less risky than Elicio Therapeutics. The stock trades about -0.07 of its potential returns per unit of risk. The Elicio Therapeutics is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 431.00 in Elicio Therapeutics on August 30, 2024 and sell it today you would earn a total of 74.00 from holding Elicio Therapeutics or generate 17.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Legend Biotech Corp vs. Elicio Therapeutics
Performance |
| Timeline |
| Legend Biotech Corp |
| Elicio Therapeutics |
Legend Biotech and Elicio Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Legend Biotech and Elicio Therapeutics
The main advantage of trading using opposite Legend Biotech and Elicio Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legend Biotech position performs unexpectedly, Elicio Therapeutics 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 Elicio Therapeutics will offset losses from the drop in Elicio Therapeutics' long position.| Legend Biotech vs. Ikena Oncology | Legend Biotech vs. Eliem Therapeutics | Legend Biotech vs. HCW Biologics | Legend Biotech vs. RenovoRx |
| Elicio Therapeutics vs. Sea | Elicio Therapeutics vs. The Cheesecake Factory | Elicio Therapeutics vs. Titan Machinery | Elicio Therapeutics vs. Fast Retailing Co |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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