Correlation Between Clarity Pharmaceuticals and Inhibrx

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

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

Diversification Opportunities for Clarity Pharmaceuticals and Inhibrx

0.41

Correlation Coefficient

Clarity Pharmaceuticals  Inhibrx

Very weak diversification

The 3 months correlation between Clarity and Inhibrx is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Clarity Pharmaceuticals and Inhibrx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inhibrx and Clarity Pharmaceuticals 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 Clarity Pharmaceuticals are associated (or correlated) with Inhibrx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inhibrx has no effect on the direction of Clarity Pharmaceuticals i.e., Clarity Pharmaceuticals and Inhibrx go up and down completely randomly.

Pair Corralation between Clarity Pharmaceuticals and Inhibrx

Assuming the 90 days horizon Clarity Pharmaceuticals is expected to under-perform the Inhibrx. In addition to that, Clarity Pharmaceuticals is 2.41 times more volatile than Inhibrx. It trades about -0.14 of its total potential returns per unit of risk. Inhibrx is currently generating about 0.05 per unit of volatility. If you would invest  1,527  in Inhibrx on October 7, 2024 and sell it today you would earn a total of  88.00  from holding Inhibrx or generate 5.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Clarity Pharmaceuticals  vs.  Inhibrx

Clarity Pharmaceuticals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Clarity Pharmaceuticals 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 basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Inhibrx

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Inhibrx are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak fundamental drivers, Inhibrx may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Clarity Pharmaceuticals and Inhibrx

The main advantage of trading using opposite Clarity Pharmaceuticals and Inhibrx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clarity Pharmaceuticals position performs unexpectedly, Inhibrx 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 Inhibrx will offset losses from the drop in Inhibrx's long position.

The idea behind Clarity Pharmaceuticals and Inhibrx 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.