Correlation Between Inhibrx and Cencora

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

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

Diversification Opportunities for Inhibrx and Cencora

-0.05

Correlation Coefficient

Inhibrx  Cencora

Good diversification

The 3 months correlation between Inhibrx and Cencora is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Inhibrx and Cencora in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cencora and Inhibrx 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 Inhibrx are associated (or correlated) with Cencora. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cencora has no effect on the direction of Inhibrx i.e., Inhibrx and Cencora go up and down completely randomly.

Pair Corralation between Inhibrx and Cencora

Given the investment horizon of 90 days Inhibrx is expected to under-perform the Cencora. In addition to that, Inhibrx is 2.62 times more volatile than Cencora. It trades about -0.05 of its total potential returns per unit of risk. Cencora is currently generating about 0.08 per unit of volatility. If you would invest  23,394  in Cencora on October 25, 2024 and sell it today you would earn a total of  1,302  from holding Cencora or generate 5.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Inhibrx  vs.  Cencora

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 latest weak performance, the Stock's fundamental drivers remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Cencora

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Cencora are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Cencora is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Inhibrx and Cencora

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

The idea behind Inhibrx and Cencora 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.