Correlation Between NexGel Warrant and Legend Biotech
Can any of the company-specific risk be diversified away by investing in both NexGel Warrant and Legend Biotech 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 NexGel Warrant and Legend Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NexGel Warrant and Legend Biotech Corp, you can compare the effects of market volatilities on NexGel Warrant and Legend Biotech 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 NexGel Warrant with a short position of Legend Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of NexGel Warrant and Legend Biotech.
Diversification Opportunities for NexGel Warrant and Legend Biotech
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NexGel and Legend is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding NexGel Warrant and Legend Biotech Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Legend Biotech Corp and NexGel Warrant 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 NexGel Warrant are associated (or correlated) with Legend Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Legend Biotech Corp has no effect on the direction of NexGel Warrant i.e., NexGel Warrant and Legend Biotech go up and down completely randomly.
Pair Corralation between NexGel Warrant and Legend Biotech
Assuming the 90 days horizon NexGel Warrant is expected to generate 4.03 times more return on investment than Legend Biotech. However, NexGel Warrant is 4.03 times more volatile than Legend Biotech Corp. It trades about 0.06 of its potential returns per unit of risk. Legend Biotech Corp is currently generating about -0.09 per unit of risk. If you would invest 50.00 in NexGel Warrant on August 28, 2024 and sell it today you would earn a total of 0.00 from holding NexGel Warrant or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NexGel Warrant vs. Legend Biotech Corp
Performance |
| Timeline |
| NexGel Warrant |
| Legend Biotech Corp |
NexGel Warrant and Legend Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NexGel Warrant and Legend Biotech
The main advantage of trading using opposite NexGel Warrant and Legend Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NexGel Warrant position performs unexpectedly, Legend Biotech 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 Legend Biotech will offset losses from the drop in Legend Biotech's long position.| NexGel Warrant vs. Heartbeam | NexGel Warrant vs. EUDA Health Holdings | NexGel Warrant vs. Nutex Health | NexGel Warrant vs. Healthcare Triangle |
| Legend Biotech vs. Eliem Therapeutics | Legend Biotech vs. HCW Biologics | Legend Biotech vs. Scpharmaceuticals | Legend Biotech vs. Milestone Pharmaceuticals |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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