Correlation Between Ginkgo Bioworks and Inhibrx

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

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

Diversification Opportunities for Ginkgo Bioworks and Inhibrx

0.18

Correlation Coefficient

Ginkgo Bioworks  Inhibrx

Average diversification

The 3 months correlation between Ginkgo and Inhibrx is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Ginkgo Bioworks Holdings and Inhibrx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inhibrx and Ginkgo Bioworks 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 Ginkgo Bioworks Holdings 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 Ginkgo Bioworks i.e., Ginkgo Bioworks and Inhibrx go up and down completely randomly.

Pair Corralation between Ginkgo Bioworks and Inhibrx

Considering the 90-day investment horizon Ginkgo Bioworks Holdings is expected to under-perform the Inhibrx. In addition to that, Ginkgo Bioworks is 1.35 times more volatile than Inhibrx. It trades about -0.06 of its total potential returns per unit of risk. Inhibrx is currently generating about -0.03 per unit of volatility. If you would invest  3,500  in Inhibrx on October 9, 2024 and sell it today you would lose (1,949) from holding Inhibrx or give up 55.69% of portfolio value over 90 days.

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

Ginkgo Bioworks Holdings  vs.  Inhibrx

Ginkgo Bioworks Holdings

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ginkgo Bioworks Holdings are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Ginkgo Bioworks sustained solid returns over the last few months and may actually be approaching a breakup point.

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 Ginkgo Bioworks and Inhibrx

The main advantage of trading using opposite Ginkgo Bioworks and Inhibrx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ginkgo Bioworks 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 Ginkgo Bioworks Holdings 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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.