Correlation Between Inhibikase Therapeutics and Bruker

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

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

Diversification Opportunities for Inhibikase Therapeutics and Bruker

-0.67

Correlation Coefficient

Inhibikase Therapeutics  Bruker

Excellent diversification

The 3 months correlation between Inhibikase and Bruker is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Inhibikase Therapeutics and Bruker in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bruker and Inhibikase Therapeutics 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 Inhibikase Therapeutics are associated (or correlated) with Bruker. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bruker has no effect on the direction of Inhibikase Therapeutics i.e., Inhibikase Therapeutics and Bruker go up and down completely randomly.

Pair Corralation between Inhibikase Therapeutics and Bruker

Considering the 90-day investment horizon Inhibikase Therapeutics is expected to generate 3.04 times more return on investment than Bruker. However, Inhibikase Therapeutics is 3.04 times more volatile than Bruker. It trades about 0.04 of its potential returns per unit of risk. Bruker is currently generating about -0.01 per unit of risk. If you would invest  300.00  in Inhibikase Therapeutics on September 20, 2024 and sell it today you would earn a total of  16.00  from holding Inhibikase Therapeutics or generate 5.33% return on investment over 90 days.

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

Inhibikase Therapeutics  vs.  Bruker

Inhibikase Therapeutics

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Inhibikase Therapeutics are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak forward-looking signals, Inhibikase Therapeutics unveiled solid returns over the last few months and may actually be approaching a breakup point.

Bruker

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bruker has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's forward-looking signals remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Inhibikase Therapeutics and Bruker

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

The idea behind Inhibikase Therapeutics and Bruker 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 the Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.