Correlation Between Legend Biotech and Replimune
Can any of the company-specific risk be diversified away by investing in both Legend Biotech and Replimune 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 Replimune 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 Replimune Group, you can compare the effects of market volatilities on Legend Biotech and Replimune 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 Replimune. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legend Biotech and Replimune.
Diversification Opportunities for Legend Biotech and Replimune
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Legend and Replimune is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Legend Biotech Corp and Replimune Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Replimune Group 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 Replimune. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Replimune Group has no effect on the direction of Legend Biotech i.e., Legend Biotech and Replimune go up and down completely randomly.
Pair Corralation between Legend Biotech and Replimune
Given the investment horizon of 90 days Legend Biotech is expected to generate 167.0 times less return on investment than Replimune. But when comparing it to its historical volatility, Legend Biotech Corp is 1.71 times less risky than Replimune. It trades about 0.0 of its potential returns per unit of risk. Replimune Group is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,974 in Replimune Group on November 1, 2024 and sell it today you would lose (612.00) from holding Replimune Group or give up 31.0% 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. Replimune Group
Performance |
| Timeline |
| Legend Biotech Corp |
| Replimune Group |
Legend Biotech and Replimune Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Legend Biotech and Replimune
The main advantage of trading using opposite Legend Biotech and Replimune positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legend Biotech position performs unexpectedly, Replimune 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 Replimune will offset losses from the drop in Replimune's long position.| Legend Biotech vs. Vaxcyte | Legend Biotech vs. Apellis Pharmaceuticals | Legend Biotech vs. Travere Therapeutics | Legend Biotech vs. Akero Therapeutics |
| Replimune vs. Nuvalent | Replimune vs. Ventyx Biosciences | Replimune vs. Ascendis Pharma AS | Replimune vs. United 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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