Correlation Between Incyte and Seagen

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

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

Diversification Opportunities for Incyte and Seagen

0.0

Correlation Coefficient

Incyte  Seagen

Pay attention - limited upside

The 3 months correlation between Incyte and Seagen is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Incyte and Seagen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seagen Inc and Incyte 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 Incyte are associated (or correlated) with Seagen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seagen Inc has no effect on the direction of Incyte i.e., Incyte and Seagen go up and down completely randomly.

Pair Corralation between Incyte and Seagen

If you would invest  7,459  in Incyte on November 29, 2024 and sell it today you would lose (29.00) from holding Incyte or give up 0.39% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Incyte  vs.  Seagen Inc

Incyte

Risk-Adjusted Performance

Very Weak

Over the last 90 days Incyte has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong fundamental indicators, Incyte is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Seagen Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Seagen Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Seagen is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Incyte and Seagen

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

The idea behind Incyte and Seagen Inc 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.