Correlation Between ProKidney Corp and Legend Biotech
Can any of the company-specific risk be diversified away by investing in both ProKidney Corp 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 ProKidney Corp and Legend Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProKidney Corp and Legend Biotech Corp, you can compare the effects of market volatilities on ProKidney Corp 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 ProKidney Corp with a short position of Legend Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProKidney Corp and Legend Biotech.
Diversification Opportunities for ProKidney Corp and Legend Biotech
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ProKidney and Legend is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding ProKidney Corp 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 ProKidney Corp 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 ProKidney Corp 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 ProKidney Corp i.e., ProKidney Corp and Legend Biotech go up and down completely randomly.
Pair Corralation between ProKidney Corp and Legend Biotech
Given the investment horizon of 90 days ProKidney Corp is expected to generate 2.58 times more return on investment than Legend Biotech. However, ProKidney Corp is 2.58 times more volatile than Legend Biotech Corp. It trades about 0.18 of its potential returns per unit of risk. Legend Biotech Corp is currently generating about -0.1 per unit of risk. If you would invest 160.00 in ProKidney Corp on September 1, 2024 and sell it today you would earn a total of 40.00 from holding ProKidney Corp or generate 25.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProKidney Corp vs. Legend Biotech Corp
Performance |
| Timeline |
| ProKidney Corp |
| Legend Biotech Corp |
ProKidney Corp and Legend Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProKidney Corp and Legend Biotech
The main advantage of trading using opposite ProKidney Corp and Legend Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProKidney Corp 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.| ProKidney Corp vs. Relay Therapeutics | ProKidney Corp vs. Stoke Therapeutics | ProKidney Corp vs. Pliant Therapeutics | ProKidney Corp vs. Black Diamond Therapeutics |
| 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Commodity Directory Find actively traded commodities issued by global exchanges |