Correlation Between Legend Biotech and Lipocine
Can any of the company-specific risk be diversified away by investing in both Legend Biotech and Lipocine 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 Lipocine 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 Lipocine, you can compare the effects of market volatilities on Legend Biotech and Lipocine 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 Lipocine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legend Biotech and Lipocine.
Diversification Opportunities for Legend Biotech and Lipocine
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Legend and Lipocine is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Legend Biotech Corp and Lipocine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lipocine 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 Lipocine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lipocine has no effect on the direction of Legend Biotech i.e., Legend Biotech and Lipocine go up and down completely randomly.
Pair Corralation between Legend Biotech and Lipocine
Given the investment horizon of 90 days Legend Biotech Corp is expected to under-perform the Lipocine. But the stock apears to be less risky and, when comparing its historical volatility, Legend Biotech Corp is 1.91 times less risky than Lipocine. The stock trades about 0.0 of its potential returns per unit of risk. The Lipocine is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 734.00 in Lipocine on August 26, 2024 and sell it today you would lose (219.00) from holding Lipocine or give up 29.84% 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. Lipocine
Performance |
| Timeline |
| Legend Biotech Corp |
| Lipocine |
Legend Biotech and Lipocine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Legend Biotech and Lipocine
The main advantage of trading using opposite Legend Biotech and Lipocine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legend Biotech position performs unexpectedly, Lipocine 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 Lipocine will offset losses from the drop in Lipocine's long position.| Legend Biotech vs. Eliem Therapeutics | Legend Biotech vs. HCW Biologics | Legend Biotech vs. Scpharmaceuticals | Legend Biotech vs. Milestone Pharmaceuticals |
| Lipocine vs. Capricor Therapeutics | Lipocine vs. Akari Therapeutics PLC | Lipocine vs. Soleno Therapeutics | Lipocine vs. Bio Path Holdings |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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