Correlation Between Legend Biotech and SanBio Company
Can any of the company-specific risk be diversified away by investing in both Legend Biotech and SanBio Company 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 SanBio Company 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 SanBio Company Limited, you can compare the effects of market volatilities on Legend Biotech and SanBio Company 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 SanBio Company. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legend Biotech and SanBio Company.
Diversification Opportunities for Legend Biotech and SanBio Company
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Legend and SanBio is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Legend Biotech Corp and SanBio Company Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SanBio Limited 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 SanBio Company. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SanBio Limited has no effect on the direction of Legend Biotech i.e., Legend Biotech and SanBio Company go up and down completely randomly.
Pair Corralation between Legend Biotech and SanBio Company
If you would invest 385.00 in SanBio Company Limited on August 31, 2024 and sell it today you would earn a total of 0.00 from holding SanBio Company Limited or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Legend Biotech Corp vs. SanBio Company Limited
Performance |
| Timeline |
| Legend Biotech Corp |
| SanBio Limited |
Legend Biotech and SanBio Company Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Legend Biotech and SanBio Company
The main advantage of trading using opposite Legend Biotech and SanBio Company positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legend Biotech position performs unexpectedly, SanBio Company 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 SanBio Company will offset losses from the drop in SanBio Company's long position.| Legend Biotech vs. Vaxcyte | Legend Biotech vs. Apellis Pharmaceuticals | Legend Biotech vs. Travere Therapeutics | Legend Biotech vs. Akero Therapeutics |
| SanBio Company vs. Rigel Pharmaceuticals | SanBio Company vs. Geron | SanBio Company vs. Verastem | SanBio Company vs. Immutep Ltd ADR |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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