Correlation Between Seagen and Pharming Group

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

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

Diversification Opportunities for Seagen and Pharming Group

0.0

Correlation Coefficient

Seagen  Pharming Group

Pay attention - limited upside

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

Pair Corralation between Seagen and Pharming Group

If you would invest  75.00  in Pharming Group NV on December 2, 2024 and sell it today you would earn a total of  18.00  from holding Pharming Group NV or generate 24.0% return on investment over 90 days.

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

Seagen Inc  vs.  Pharming Group NV

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.

Pharming Group NV

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Pharming Group NV are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Pharming Group reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Seagen and Pharming Group

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

The idea behind Seagen Inc and Pharming Group NV 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.

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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.