Correlation Between Legend Biotech and Liquidia Technologies
Can any of the company-specific risk be diversified away by investing in both Legend Biotech and Liquidia Technologies 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 Liquidia Technologies 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 Liquidia Technologies, you can compare the effects of market volatilities on Legend Biotech and Liquidia Technologies 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 Liquidia Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legend Biotech and Liquidia Technologies.
Diversification Opportunities for Legend Biotech and Liquidia Technologies
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Legend and Liquidia is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Legend Biotech Corp and Liquidia Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liquidia Technologies 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 Liquidia Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liquidia Technologies has no effect on the direction of Legend Biotech i.e., Legend Biotech and Liquidia Technologies go up and down completely randomly.
Pair Corralation between Legend Biotech and Liquidia Technologies
Given the investment horizon of 90 days Legend Biotech is expected to generate 2.42 times less return on investment than Liquidia Technologies. In addition to that, Legend Biotech is 1.04 times more volatile than Liquidia Technologies. It trades about 0.17 of its total potential returns per unit of risk. Liquidia Technologies is currently generating about 0.43 per unit of volatility. If you would invest 1,246 in Liquidia Technologies on November 9, 2024 and sell it today you would earn a total of 350.00 from holding Liquidia Technologies or generate 28.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Legend Biotech Corp vs. Liquidia Technologies
Performance |
| Timeline |
| Legend Biotech Corp |
| Liquidia Technologies |
Legend Biotech and Liquidia Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Legend Biotech and Liquidia Technologies
The main advantage of trading using opposite Legend Biotech and Liquidia Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legend Biotech position performs unexpectedly, Liquidia Technologies 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 Liquidia Technologies will offset losses from the drop in Liquidia Technologies' long position.| Legend Biotech vs. Vaxcyte | Legend Biotech vs. Apellis Pharmaceuticals | Legend Biotech vs. Travere Therapeutics | Legend Biotech vs. Akero Therapeutics |
| Liquidia Technologies vs. Biomarin Pharmaceutical | Liquidia Technologies vs. Vaxcyte | Liquidia Technologies vs. Legend Biotech Corp | Liquidia Technologies vs. Bio Techne Corp |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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