Correlation Between Legend Biotech and Ikena Oncology
Can any of the company-specific risk be diversified away by investing in both Legend Biotech and Ikena Oncology 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 Ikena Oncology 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 Ikena Oncology, you can compare the effects of market volatilities on Legend Biotech and Ikena Oncology 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 Ikena Oncology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legend Biotech and Ikena Oncology.
Diversification Opportunities for Legend Biotech and Ikena Oncology
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Legend and Ikena is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Legend Biotech Corp and Ikena Oncology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ikena Oncology 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 Ikena Oncology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ikena Oncology has no effect on the direction of Legend Biotech i.e., Legend Biotech and Ikena Oncology go up and down completely randomly.
Pair Corralation between Legend Biotech and Ikena Oncology
Given the investment horizon of 90 days Legend Biotech Corp is expected to generate 1.38 times more return on investment than Ikena Oncology. However, Legend Biotech is 1.38 times more volatile than Ikena Oncology. It trades about 0.01 of its potential returns per unit of risk. Ikena Oncology is currently generating about -0.19 per unit of risk. If you would invest 3,664 in Legend Biotech Corp on November 28, 2024 and sell it today you would lose (11.00) from holding Legend Biotech Corp or give up 0.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Legend Biotech Corp vs. Ikena Oncology
Performance |
| Timeline |
| Legend Biotech Corp |
| Ikena Oncology |
Legend Biotech and Ikena Oncology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Legend Biotech and Ikena Oncology
The main advantage of trading using opposite Legend Biotech and Ikena Oncology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legend Biotech position performs unexpectedly, Ikena Oncology 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 Ikena Oncology will offset losses from the drop in Ikena Oncology's long position.| Legend Biotech vs. Vaxcyte | Legend Biotech vs. Apellis Pharmaceuticals | Legend Biotech vs. Travere Therapeutics | Legend Biotech vs. Akero Therapeutics |
| Ikena Oncology vs. Edgewise Therapeutics | Ikena Oncology vs. Design Therapeutics | Ikena Oncology vs. Xilio Development | Ikena Oncology vs. Monte Rosa 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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |