Correlation Between Legend Biotech and Seagen
Can any of the company-specific risk be diversified away by investing in both Legend Biotech and Seagen 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 Seagen 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 Seagen Inc, you can compare the effects of market volatilities on Legend Biotech and Seagen 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 Seagen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legend Biotech and Seagen.
Diversification Opportunities for Legend Biotech and Seagen
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Legend and Seagen is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Legend Biotech Corp and Seagen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seagen Inc 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 Seagen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seagen Inc has no effect on the direction of Legend Biotech i.e., Legend Biotech and Seagen go up and down completely randomly.
Pair Corralation between Legend Biotech and Seagen
Given the investment horizon of 90 days Legend Biotech Corp is expected to under-perform the Seagen. In addition to that, Legend Biotech is 1.24 times more volatile than Seagen Inc. It trades about 0.0 of its total potential returns per unit of risk. Seagen Inc is currently generating about 0.15 per unit of volatility. If you would invest 13,600 in Seagen Inc on August 27, 2024 and sell it today you would earn a total of 6,023 from holding Seagen Inc or generate 44.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 25.71% |
| Values | Daily Returns |
Legend Biotech Corp vs. Seagen Inc
Performance |
| Timeline |
| Legend Biotech Corp |
| Seagen Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Legend Biotech and Seagen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Legend Biotech and Seagen
The main advantage of trading using opposite Legend Biotech and Seagen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legend Biotech position performs unexpectedly, Seagen 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 Seagen will offset losses from the drop in Seagen's long position.| Legend Biotech vs. Eliem Therapeutics | Legend Biotech vs. HCW Biologics | Legend Biotech vs. Scpharmaceuticals | Legend Biotech vs. Milestone Pharmaceuticals |
| Seagen vs. Biomarin Pharmaceutical | Seagen vs. Alnylam Pharmaceuticals | Seagen vs. Exelixis | Seagen vs. Halozyme 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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