Correlation Between Replimune and Legend Biotech
Can any of the company-specific risk be diversified away by investing in both Replimune 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 Replimune and Legend Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Replimune Group and Legend Biotech Corp, you can compare the effects of market volatilities on Replimune 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 Replimune with a short position of Legend Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Replimune and Legend Biotech.
Diversification Opportunities for Replimune and Legend Biotech
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Replimune and Legend is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Replimune Group 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 Replimune 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 Replimune Group 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 Replimune i.e., Replimune and Legend Biotech go up and down completely randomly.
Pair Corralation between Replimune and Legend Biotech
Given the investment horizon of 90 days Replimune Group is expected to generate 1.73 times more return on investment than Legend Biotech. However, Replimune is 1.73 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 760.00 in Replimune Group on September 2, 2024 and sell it today you would earn a total of 648.00 from holding Replimune Group or generate 85.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Replimune Group vs. Legend Biotech Corp
Performance |
| Timeline |
| Replimune Group |
| Legend Biotech Corp |
Replimune and Legend Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Replimune and Legend Biotech
The main advantage of trading using opposite Replimune and Legend Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Replimune 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.| Replimune vs. Nuvalent | Replimune vs. Ventyx Biosciences | Replimune vs. Ascendis Pharma AS | Replimune vs. United 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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