Correlation Between Seagen and Alector

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

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

Diversification Opportunities for Seagen and Alector

0.0

Correlation Coefficient

Seagen  Alector

Pay attention - limited upside

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

Pair Corralation between Seagen and Alector

If you would invest (100.00) in Seagen Inc on December 29, 2024 and sell it today you would earn a total of  100.00  from holding Seagen Inc or generate -100.0% return on investment over 90 days.

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

Seagen Inc  vs.  Alector

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.

Alector

Risk-Adjusted Performance

Very Weak

Over the last 90 days Alector has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Seagen and Alector

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

The idea behind Seagen Inc and Alector 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.