Correlation Between Legend Biotech and Adaptive Biotechnologies
Can any of the company-specific risk be diversified away by investing in both Legend Biotech and Adaptive Biotechnologies 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 Legend Biotech and Adaptive Biotechnologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Legend Biotech Corp and Adaptive Biotechnologies Corp, you can compare the effects of market volatilities on Legend Biotech and Adaptive Biotechnologies 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 Legend Biotech with a short position of Adaptive Biotechnologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legend Biotech and Adaptive Biotechnologies.
Diversification Opportunities for Legend Biotech and Adaptive Biotechnologies
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Legend and Adaptive is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Legend Biotech Corp and Adaptive Biotechnologies Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adaptive Biotechnologies and Legend Biotech 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 Legend Biotech Corp are associated (or correlated) with Adaptive Biotechnologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adaptive Biotechnologies has no effect on the direction of Legend Biotech i.e., Legend Biotech and Adaptive Biotechnologies go up and down completely randomly.
Pair Corralation between Legend Biotech and Adaptive Biotechnologies
Given the investment horizon of 90 days Legend Biotech Corp is expected to under-perform the Adaptive Biotechnologies. But the stock apears to be less risky and, when comparing its historical volatility, Legend Biotech Corp is 1.68 times less risky than Adaptive Biotechnologies. The stock trades about -0.01 of its potential returns per unit of risk. The Adaptive Biotechnologies Corp is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 808.00 in Adaptive Biotechnologies Corp on September 26, 2024 and sell it today you would lose (169.00) from holding Adaptive Biotechnologies Corp or give up 20.92% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Legend Biotech Corp vs. Adaptive Biotechnologies Corp
Performance |
Timeline |
Legend Biotech Corp |
Adaptive Biotechnologies |
Legend Biotech and Adaptive Biotechnologies Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Legend Biotech and Adaptive Biotechnologies
The main advantage of trading using opposite Legend Biotech and Adaptive Biotechnologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legend Biotech position performs unexpectedly, Adaptive Biotechnologies 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 Adaptive Biotechnologies will offset losses from the drop in Adaptive Biotechnologies' long position.Legend Biotech vs. Vaxcyte | Legend Biotech vs. Apellis Pharmaceuticals | Legend Biotech vs. Travere Therapeutics | Legend Biotech vs. Akero Therapeutics |
Adaptive Biotechnologies vs. Twist Bioscience Corp | Adaptive Biotechnologies vs. Natera Inc | Adaptive Biotechnologies vs. Guardant Health | Adaptive Biotechnologies vs. Castle Biosciences |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
Content Syndication Quickly integrate customizable finance content to your own investment portal | |
Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |