Correlation Between Seagen and Biomarin Pharmaceutical
Can any of the company-specific risk be diversified away by investing in both Seagen and Biomarin Pharmaceutical 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 Biomarin Pharmaceutical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seagen Inc and Biomarin Pharmaceutical, you can compare the effects of market volatilities on Seagen and Biomarin Pharmaceutical 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 Biomarin Pharmaceutical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seagen and Biomarin Pharmaceutical.
Diversification Opportunities for Seagen and Biomarin Pharmaceutical
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Seagen and Biomarin is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Seagen Inc and Biomarin Pharmaceutical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biomarin Pharmaceutical 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 Biomarin Pharmaceutical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biomarin Pharmaceutical has no effect on the direction of Seagen i.e., Seagen and Biomarin Pharmaceutical go up and down completely randomly.
Pair Corralation between Seagen and Biomarin Pharmaceutical
If you would invest 8,476 in Biomarin Pharmaceutical on January 20, 2024 and sell it today you would earn a total of 531.00 from holding Biomarin Pharmaceutical or generate 6.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Seagen Inc vs. Biomarin Pharmaceutical
Performance |
| Timeline |
| Seagen Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Biomarin Pharmaceutical |
Seagen and Biomarin Pharmaceutical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seagen and Biomarin Pharmaceutical
The main advantage of trading using opposite Seagen and Biomarin Pharmaceutical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seagen position performs unexpectedly, Biomarin Pharmaceutical 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 Biomarin Pharmaceutical will offset losses from the drop in Biomarin Pharmaceutical's long position.| Seagen vs. Biomarin Pharmaceutical | Seagen vs. Alnylam Pharmaceuticals | Seagen vs. Exelixis | Seagen vs. Halozyme Therapeutics |
| Biomarin Pharmaceutical vs. Alnylam Pharmaceuticals | Biomarin Pharmaceutical vs. Exelixis | Biomarin Pharmaceutical vs. Halozyme Therapeutics | Biomarin Pharmaceutical vs. Arrowhead Pharmaceuticals |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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