Correlation Between National Vision and Inhibrx

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

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

Diversification Opportunities for National Vision and Inhibrx

-0.24

Correlation Coefficient

National Vision  Inhibrx

Very good diversification

The 3 months correlation between National and Inhibrx is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding National Vision Holdings and Inhibrx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inhibrx and National Vision 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 National Vision 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 National Vision i.e., National Vision and Inhibrx go up and down completely randomly.

Pair Corralation between National Vision and Inhibrx

Considering the 90-day investment horizon National Vision Holdings is expected to under-perform the Inhibrx. But the stock apears to be less risky and, when comparing its historical volatility, National Vision Holdings is 1.29 times less risky than Inhibrx. The stock trades about -0.05 of its potential returns per unit of risk. The Inhibrx is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  2,357  in Inhibrx on September 16, 2024 and sell it today you would lose (895.00) from holding Inhibrx or give up 37.97% of portfolio value over 90 days.

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

National Vision Holdings  vs.  Inhibrx

National Vision Holdings

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in National Vision Holdings are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent basic indicators, National Vision may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Inhibrx

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Inhibrx has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's fundamental drivers remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with National Vision and Inhibrx

The main advantage of trading using opposite National Vision and Inhibrx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Vision 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 National Vision 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.