Correlation Between Vaxcyte and Legend Biotech
Can any of the company-specific risk be diversified away by investing in both Vaxcyte 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 Vaxcyte and Legend Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vaxcyte and Legend Biotech Corp, you can compare the effects of market volatilities on Vaxcyte 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 Vaxcyte with a short position of Legend Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vaxcyte and Legend Biotech.
Diversification Opportunities for Vaxcyte and Legend Biotech
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Vaxcyte and Legend is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Vaxcyte 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 Vaxcyte 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 Vaxcyte 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 Vaxcyte i.e., Vaxcyte and Legend Biotech go up and down completely randomly.
Pair Corralation between Vaxcyte and Legend Biotech
Given the investment horizon of 90 days Vaxcyte is expected to generate 1.12 times more return on investment than Legend Biotech. However, Vaxcyte is 1.12 times more volatile than Legend Biotech Corp. It trades about 0.07 of its potential returns per unit of risk. Legend Biotech Corp is currently generating about -0.04 per unit of risk. If you would invest 5,096 in Vaxcyte on August 31, 2024 and sell it today you would earn a total of 4,338 from holding Vaxcyte or generate 85.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vaxcyte vs. Legend Biotech Corp
Performance |
| Timeline |
| Vaxcyte |
| Legend Biotech Corp |
Vaxcyte and Legend Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vaxcyte and Legend Biotech
The main advantage of trading using opposite Vaxcyte and Legend Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vaxcyte 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.| Vaxcyte vs. Larimar Therapeutics | Vaxcyte vs. Syndax Pharmaceuticals | Vaxcyte vs. Merus BV | Vaxcyte vs. Sutro Biopharma |
| Legend Biotech vs. Vaxcyte | Legend Biotech vs. Apellis Pharmaceuticals | Legend Biotech vs. Travere Therapeutics | Legend Biotech vs. Akero 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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