Correlation Between Inhibikase Therapeutics and Equillium

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

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

Diversification Opportunities for Inhibikase Therapeutics and Equillium

-0.13

Correlation Coefficient

Inhibikase Therapeutics  Equillium

Good diversification

The 3 months correlation between Inhibikase and Equillium is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Inhibikase Therapeutics and Equillium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equillium 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 Equillium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equillium has no effect on the direction of Inhibikase Therapeutics i.e., Inhibikase Therapeutics and Equillium go up and down completely randomly.

Pair Corralation between Inhibikase Therapeutics and Equillium

Considering the 90-day investment horizon Inhibikase Therapeutics is expected to generate 0.88 times more return on investment than Equillium. However, Inhibikase Therapeutics is 1.13 times less risky than Equillium. It trades about -0.04 of its potential returns per unit of risk. Equillium is currently generating about -0.08 per unit of risk. If you would invest  324.00  in Inhibikase Therapeutics on December 29, 2024 and sell it today you would lose (95.00) from holding Inhibikase Therapeutics or give up 29.32% of portfolio value over 90 days.

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

Inhibikase Therapeutics  vs.  Equillium

Inhibikase Therapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Inhibikase Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's forward-looking signals remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Equillium

Risk-Adjusted Performance

Very Weak

Over the last 90 days Equillium 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 basic indicators remain relatively invariable which may send shares a bit higher in April 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 Equillium

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

The idea behind Inhibikase Therapeutics and Equillium 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.