Correlation Between Wave Life and Seagen

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

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

Diversification Opportunities for Wave Life and Seagen

0.0

Correlation Coefficient

Wave Life  Seagen

Pay attention - limited upside

The 3 months correlation between Wave and Seagen is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Wave Life Sciences and Seagen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seagen Inc and Wave Life 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 Wave Life Sciences 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 Wave Life i.e., Wave Life and Seagen go up and down completely randomly.

Pair Corralation between Wave Life and Seagen

If you would invest (100.00) in Seagen Inc on December 27, 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

Wave Life Sciences  vs.  Seagen Inc

Wave Life Sciences

Risk-Adjusted Performance

Very Weak

Over the last 90 days Wave Life Sciences 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 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.

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 Wave Life and Seagen

The main advantage of trading using opposite Wave Life and Seagen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wave Life 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 Wave Life Sciences 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.