Correlation Between NYSE Composite and Legend Biotech
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Legend Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Legend Biotech Corp, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Legend Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Legend Biotech.
Diversification Opportunities for NYSE Composite and Legend Biotech
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between NYSE and Legend is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite 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 NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and Legend Biotech go up and down completely randomly.
Pair Corralation between NYSE Composite and Legend Biotech
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.26 times more return on investment than Legend Biotech. However, NYSE Composite is 3.88 times less risky than Legend Biotech. It trades about 0.08 of its potential returns per unit of risk. Legend Biotech Corp is currently generating about 0.0 per unit of risk. If you would invest 1,547,479 in NYSE Composite on August 24, 2024 and sell it today you would earn a total of 464,866 from holding NYSE Composite or generate 30.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Legend Biotech Corp
Performance |
| Timeline |
NYSE Composite and Legend Biotech Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Legend Biotech Corp
Pair trading matchups for Legend Biotech
Pair Trading with NYSE Composite and Legend Biotech
The main advantage of trading using opposite NYSE Composite and Legend Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Awilco Drilling PLC | NYSE Composite vs. AKITA Drilling | NYSE Composite vs. SunOpta | NYSE Composite vs. Delek Drilling |
| Legend Biotech vs. Lyra Therapeutics | Legend Biotech vs. Hookipa Pharma | Legend Biotech vs. Cingulate Warrants | Legend Biotech vs. SAB Biotherapeutics |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |