Two Equities Correlation Analysis
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LGNXZ
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This model provides you with a quick lookup of cross correlation between two equities. Please specify two instruments to run the correlation.
Diversification Opportunities for Ligand Pharms and NYSE Composite
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ligand and NYSE is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Ligand Pharms Glucagon and NYSE Composite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NYSE Composite and Ligand Pharms 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 Ligand Pharms Glucagon are associated (or correlated) with NYSE Composite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NYSE Composite has no effect on the direction of Ligand Pharms i.e., Ligand Pharms and NYSE Composite go up and down completely randomly.
Pair Corralation between Ligand Pharms and NYSE Composite
Assuming the 90 days horizon Ligand Pharms Glucagon is expected to generate 79.41 times more return on investment than NYSE Composite. However, Ligand Pharms is 79.41 times more volatile than NYSE Composite. It trades about 0.17 of its potential returns per unit of risk. NYSE Composite is currently generating about 0.18 per unit of risk. If you would invest 0.21 in Ligand Pharms Glucagon on January 18, 2024 and sell it today you would lose (0.06) from holding Ligand Pharms Glucagon or give up 28.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 18.7% |
| Values | Daily Returns |
Ligand Pharms Glucagon vs. NYSE Composite
Performance |
| Timeline |
Ligand Pharms and NYSE Composite Volatility Contrast
Predicted Return Density |
| Returns |
Ligand Pharms Glucagon
Pair trading matchups for Ligand Pharms
NYSE Composite
Pair trading matchups for NYSE Composite
Pair Trading with Ligand Pharms and NYSE Composite
The main advantage of trading using opposite Ligand Pharms and NYSE Composite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ligand Pharms position performs unexpectedly, NYSE Composite 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 NYSE Composite will offset losses from the drop in NYSE Composite's long position.| Ligand Pharms vs. Marathon Group Corp | Ligand Pharms vs. Halitron | Ligand Pharms vs. Icon Media Holdings | Ligand Pharms vs. Protext Mobility |
| NYSE Composite vs. Emerson Radio | NYSE Composite vs. Brunswick | NYSE Composite vs. Mattel Inc | NYSE Composite vs. United Parks Resorts |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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