Correlation Between Legend Biotech and Iteos Therapeutics
Can any of the company-specific risk be diversified away by investing in both Legend Biotech and Iteos 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 Iteos 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 Iteos Therapeutics, you can compare the effects of market volatilities on Legend Biotech and Iteos 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 Iteos Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legend Biotech and Iteos Therapeutics.
Diversification Opportunities for Legend Biotech and Iteos Therapeutics
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Legend and Iteos is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Legend Biotech Corp and Iteos Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iteos 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 Iteos Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iteos Therapeutics has no effect on the direction of Legend Biotech i.e., Legend Biotech and Iteos Therapeutics go up and down completely randomly.
Pair Corralation between Legend Biotech and Iteos Therapeutics
Given the investment horizon of 90 days Legend Biotech Corp is expected to under-perform the Iteos Therapeutics. In addition to that, Legend Biotech is 1.07 times more volatile than Iteos Therapeutics. It trades about -0.07 of its total potential returns per unit of risk. Iteos Therapeutics is currently generating about 0.0 per unit of volatility. If you would invest 858.00 in Iteos Therapeutics on August 30, 2024 and sell it today you would lose (4.00) from holding Iteos Therapeutics or give up 0.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Legend Biotech Corp vs. Iteos Therapeutics
Performance |
| Timeline |
| Legend Biotech Corp |
| Iteos Therapeutics |
Legend Biotech and Iteos Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Legend Biotech and Iteos Therapeutics
The main advantage of trading using opposite Legend Biotech and Iteos Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legend Biotech position performs unexpectedly, Iteos 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 Iteos Therapeutics will offset losses from the drop in Iteos Therapeutics' long position.| Legend Biotech vs. Ikena Oncology | Legend Biotech vs. Eliem Therapeutics | Legend Biotech vs. HCW Biologics | Legend Biotech vs. RenovoRx |
| Iteos Therapeutics vs. Annexon | Iteos Therapeutics vs. Monte Rosa Therapeutics | Iteos Therapeutics vs. Design Therapeutics | Iteos Therapeutics vs. Erasca Inc |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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