Correlation Between Legend Biotech and REMY COINTREAU

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Can any of the company-specific risk be diversified away by investing in both Legend Biotech and REMY COINTREAU 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 Legend Biotech and REMY COINTREAU into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Legend Biotech Corp and REMY COINTREAU, you can compare the effects of market volatilities on Legend Biotech and REMY COINTREAU 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 Legend Biotech with a short position of REMY COINTREAU. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legend Biotech and REMY COINTREAU.

Diversification Opportunities for Legend Biotech and REMY COINTREAU

0.35
  Correlation Coefficient

Weak diversification

The 3 months correlation between Legend and REMYY is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Legend Biotech Corp and REMY COINTREAU in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REMY COINTREAU and Legend Biotech 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 Legend Biotech Corp are associated (or correlated) with REMY COINTREAU. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REMY COINTREAU has no effect on the direction of Legend Biotech i.e., Legend Biotech and REMY COINTREAU go up and down completely randomly.

Pair Corralation between Legend Biotech and REMY COINTREAU

Given the investment horizon of 90 days Legend Biotech Corp is expected to generate 1.88 times more return on investment than REMY COINTREAU. However, Legend Biotech is 1.88 times more volatile than REMY COINTREAU. It trades about 0.04 of its potential returns per unit of risk. REMY COINTREAU is currently generating about 0.01 per unit of risk. If you would invest  2,978  in Legend Biotech Corp on July 6, 2022 and sell it today you would earn a total of  1,131  from holding Legend Biotech Corp or generate 37.98% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Legend Biotech Corp  vs.  REMY COINTREAU

 Performance (%) 
       Timeline  
Legend Biotech Corp 
Legend Performance
0 of 100
Over the last 90 days Legend Biotech Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical and fundamental indicators remain quite persistent which may send shares a bit higher in November 2022. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Legend Price Channel

REMY COINTREAU 
REMYY Performance
0 of 100
Over the last 90 days REMY COINTREAU has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, REMY COINTREAU is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

REMYY Price Channel

Legend Biotech and REMY COINTREAU Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Legend Biotech and REMY COINTREAU

The main advantage of trading using opposite Legend Biotech and REMY COINTREAU positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legend Biotech position performs unexpectedly, REMY COINTREAU 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 REMY COINTREAU will offset losses from the drop in REMY COINTREAU's long position.
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The idea behind Legend Biotech Corp and REMY COINTREAU 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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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 CEO Directory module to screen CEOs from public companies around the world.

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