Correlation Between Seagen and Perrigo

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Seagen and Perrigo 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 Perrigo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seagen Inc and Perrigo Company, you can compare the effects of market volatilities on Seagen and Perrigo 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 Perrigo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seagen and Perrigo.

Diversification Opportunities for Seagen and Perrigo

0.7
  Correlation Coefficient

Poor diversification

The 3 months correlation between Seagen and Perrigo is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Seagen Inc and Perrigo Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perrigo Company 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 Perrigo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perrigo Company has no effect on the direction of Seagen i.e., Seagen and Perrigo go up and down completely randomly.

Pair Corralation between Seagen and Perrigo

Given the investment horizon of 90 days Seagen Inc is expected to generate 1.31 times more return on investment than Perrigo. However, Seagen is 1.31 times more volatile than Perrigo Company. It trades about 0.02 of its potential returns per unit of risk. Perrigo Company is currently generating about -0.02 per unit of risk. If you would invest  16,858  in Seagen Inc on April 4, 2022 and sell it today you would earn a total of  1,153  from holding Seagen Inc or generate 6.84% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Seagen Inc  vs.  Perrigo Company

 Performance (%) 
      Timeline 
Seagen Inc 
Seagen Performance
7 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Seagen Inc are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady technical and fundamental indicators, Seagen disclosed solid returns over the last few months and may actually be approaching a breakup point.

Seagen Price Channel

Perrigo Company 
Perrigo Performance
6 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Perrigo Company are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady technical and fundamental indicators, Perrigo may actually be approaching a critical reversion point that can send shares even higher in August 2022.

Structure and Payout Changes

Forward Annual Dividend Yield
0.0256
Payout Ratio
0.53
Last Split Factor
2:1
Forward Annual Dividend Rate
1.04
Dividend Date
2022-06-21
Ex Dividend Date
2022-06-02
Last Split Date
1993-08-26

Perrigo Price Channel

Seagen and Perrigo Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Seagen and Perrigo

The main advantage of trading using opposite Seagen and Perrigo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seagen position performs unexpectedly, Perrigo 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 Perrigo will offset losses from the drop in Perrigo's long position.
The idea behind Seagen Inc and Perrigo Company 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.

Other Complementary Tools

Focused Opportunities
Build portfolios using our predefined set of ideas and optimize them against your investing preferences
Go
Piotroski F Score
Get Piotroski F Score based on binary analysis strategy of nine different fundamentals
Go
CEO Directory
Screen CEOs from public companies around the world
Go
Sync Your Broker
Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors.
Go
Portfolio Rebalancing
Analyze risk-adjusted returns against different time horizons to find asset-allocation targets
Go