Correlation Between In8bio and X4 Pharmaceuticals

Can any of the company-specific risk be diversified away by investing in both In8bio and X4 Pharmaceuticals 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 In8bio and X4 Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between In8bio Inc and X4 Pharmaceuticals, you can compare the effects of market volatilities on In8bio and X4 Pharmaceuticals 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 In8bio with a short position of X4 Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of In8bio and X4 Pharmaceuticals.

Diversification Opportunities for In8bio and X4 Pharmaceuticals

-0.2

Correlation Coefficient

In8bio  X4 Pharmaceuticals

Good diversification

The 3 months correlation between In8bio and XFOR is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding In8bio Inc and X4 Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on X4 Pharmaceuticals and In8bio 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 In8bio Inc are associated (or correlated) with X4 Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of X4 Pharmaceuticals has no effect on the direction of In8bio i.e., In8bio and X4 Pharmaceuticals go up and down completely randomly.

Pair Corralation between In8bio and X4 Pharmaceuticals

Given the investment horizon of 90 days In8bio is expected to generate 5.08 times less return on investment than X4 Pharmaceuticals. In addition to that, In8bio is 1.64 times more volatile than X4 Pharmaceuticals. It trades about 0.0 of its total potential returns per unit of risk. X4 Pharmaceuticals is currently generating about 0.03 per unit of volatility. If you would invest  96.00  in X4 Pharmaceuticals on September 22, 2024 and sell it today you would lose (35.00) from holding X4 Pharmaceuticals or give up 36.46% of portfolio value over 90 days.

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

In8bio Inc  vs.  X4 Pharmaceuticals

In8bio Inc

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in In8bio Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent basic indicators, In8bio sustained solid returns over the last few months and may actually be approaching a breakup point.

X4 Pharmaceuticals

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in X4 Pharmaceuticals are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating basic indicators, X4 Pharmaceuticals reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with In8bio and X4 Pharmaceuticals

The main advantage of trading using opposite In8bio and X4 Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if In8bio position performs unexpectedly, X4 Pharmaceuticals 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 X4 Pharmaceuticals will offset losses from the drop in X4 Pharmaceuticals' long position.

The idea behind In8bio Inc and X4 Pharmaceuticals 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.