Correlation Between Legend Biotech and Enliven Therapeutics
Can any of the company-specific risk be diversified away by investing in both Legend Biotech and Enliven 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 Enliven 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 Enliven Therapeutics, you can compare the effects of market volatilities on Legend Biotech and Enliven 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 Enliven Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legend Biotech and Enliven Therapeutics.
Diversification Opportunities for Legend Biotech and Enliven Therapeutics
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Legend and Enliven is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Legend Biotech Corp and Enliven Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enliven 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 Enliven Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enliven Therapeutics has no effect on the direction of Legend Biotech i.e., Legend Biotech and Enliven Therapeutics go up and down completely randomly.
Pair Corralation between Legend Biotech and Enliven Therapeutics
Given the investment horizon of 90 days Legend Biotech Corp is expected to generate 1.04 times more return on investment than Enliven Therapeutics. However, Legend Biotech is 1.04 times more volatile than Enliven Therapeutics. It trades about -0.09 of its potential returns per unit of risk. Enliven Therapeutics is currently generating about -0.23 per unit of risk. If you would invest 4,530 in Legend Biotech Corp on August 28, 2024 and sell it today you would lose (261.00) from holding Legend Biotech Corp or give up 5.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Legend Biotech Corp vs. Enliven Therapeutics
Performance |
| Timeline |
| Legend Biotech Corp |
| Enliven Therapeutics |
Legend Biotech and Enliven Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Legend Biotech and Enliven Therapeutics
The main advantage of trading using opposite Legend Biotech and Enliven Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legend Biotech position performs unexpectedly, Enliven 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 Enliven Therapeutics will offset losses from the drop in Enliven Therapeutics' long position.| Legend Biotech vs. Eliem Therapeutics | Legend Biotech vs. HCW Biologics | Legend Biotech vs. Scpharmaceuticals | Legend Biotech vs. Milestone Pharmaceuticals |
| Enliven Therapeutics vs. Capricor Therapeutics | Enliven Therapeutics vs. Soleno Therapeutics | Enliven Therapeutics vs. Bio Path Holdings | Enliven Therapeutics vs. Moleculin Biotech |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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