Correlation Between Inhibrx and Werewolf Therapeutics

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

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

Diversification Opportunities for Inhibrx and Werewolf Therapeutics

0.23

Correlation Coefficient

Inhibrx  Werewolf Therapeutics

Modest diversification

The 3 months correlation between Inhibrx and Werewolf is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Inhibrx and Werewolf Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Werewolf Therapeutics 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 Werewolf Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Werewolf Therapeutics has no effect on the direction of Inhibrx i.e., Inhibrx and Werewolf Therapeutics go up and down completely randomly.

Pair Corralation between Inhibrx and Werewolf Therapeutics

Given the investment horizon of 90 days Inhibrx is expected to generate 0.88 times more return on investment than Werewolf Therapeutics. However, Inhibrx is 1.14 times less risky than Werewolf Therapeutics. It trades about -0.02 of its potential returns per unit of risk. Werewolf Therapeutics is currently generating about -0.13 per unit of risk. If you would invest  1,514  in Inhibrx on December 30, 2024 and sell it today you would lose (102.00) from holding Inhibrx or give up 6.74% of portfolio value over 90 days.

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

Inhibrx  vs.  Werewolf Therapeutics

Inhibrx

Risk-Adjusted Performance

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 fairly strong fundamental drivers, Inhibrx is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Werewolf Therapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Werewolf Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Inhibrx and Werewolf Therapeutics

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

The idea behind Inhibrx and Werewolf Therapeutics 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..