Correlation Between Agenus and Leap Therapeutics

Can any of the company-specific risk be diversified away by investing in both Agenus and Leap Therapeutics 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 Agenus and Leap Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Agenus Inc and Leap Therapeutics, you can compare the effects of market volatilities on Agenus and Leap Therapeutics 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 Agenus with a short position of Leap Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agenus and Leap Therapeutics.

Diversification Opportunities for Agenus and Leap Therapeutics

0.3

Correlation Coefficient

Agenus  Leap Therapeutics

Weak diversification

The 3 months correlation between Agenus and Leap is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Agenus Inc and Leap Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leap Therapeutics and Agenus 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 Agenus Inc are associated (or correlated) with Leap Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leap Therapeutics has no effect on the direction of Agenus i.e., Agenus and Leap Therapeutics go up and down completely randomly.

Pair Corralation between Agenus and Leap Therapeutics

Given the investment horizon of 90 days Agenus Inc is expected to generate 0.5 times more return on investment than Leap Therapeutics. However, Agenus Inc is 1.99 times less risky than Leap Therapeutics. It trades about -0.12 of its potential returns per unit of risk. Leap Therapeutics is currently generating about -0.22 per unit of risk. If you would invest  269.00  in Agenus Inc on December 28, 2024 and sell it today you would lose (103.00) from holding Agenus Inc or give up 38.29% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Agenus Inc  vs.  Leap Therapeutics

Agenus Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Agenus Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Leap Therapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Leap Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Agenus and Leap Therapeutics

The main advantage of trading using opposite Agenus and Leap Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agenus position performs unexpectedly, Leap Therapeutics 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 Leap Therapeutics will offset losses from the drop in Leap Therapeutics' long position.

The idea behind Agenus Inc and Leap Therapeutics pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.