Correlation Between Inhibrx and M3

Can any of the company-specific risk be diversified away by investing in both Inhibrx and M3 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 M3 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Inhibrx and M3 Inc, you can compare the effects of market volatilities on Inhibrx and M3 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 M3. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inhibrx and M3.

Diversification Opportunities for Inhibrx and M3

0.04

Correlation Coefficient

Inhibrx  M3

Significant diversification

The 3 months correlation between Inhibrx and M3 is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Inhibrx and M3 Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on M3 Inc 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 M3. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of M3 Inc has no effect on the direction of Inhibrx i.e., Inhibrx and M3 go up and down completely randomly.

Pair Corralation between Inhibrx and M3

Given the investment horizon of 90 days Inhibrx is expected to under-perform the M3. In addition to that, Inhibrx is 1.99 times more volatile than M3 Inc. It trades about -0.01 of its total potential returns per unit of risk. M3 Inc is currently generating about 0.13 per unit of volatility. If you would invest  833.00  in M3 Inc on December 28, 2024 and sell it today you would earn a total of  112.00  from holding M3 Inc or generate 13.45% return on investment over 90 days.

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

Inhibrx  vs.  M3 Inc

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 recent stock price disturbance, may contribute to short-term losses for the investors.

M3 Inc

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in M3 Inc are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating basic indicators, M3 reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Inhibrx and M3

The main advantage of trading using opposite Inhibrx and M3 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inhibrx position performs unexpectedly, M3 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 M3 will offset losses from the drop in M3's long position.

The idea behind Inhibrx and M3 Inc 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.