Correlation Between Inhibrx and OmniAb

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

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

Diversification Opportunities for Inhibrx and OmniAb

-0.26

Correlation Coefficient

Inhibrx  OmniAb

Very good diversification

The 3 months correlation between Inhibrx and OmniAb is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Inhibrx and OmniAb Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OmniAb 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 OmniAb. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OmniAb Inc has no effect on the direction of Inhibrx i.e., Inhibrx and OmniAb go up and down completely randomly.

Pair Corralation between Inhibrx and OmniAb

Given the investment horizon of 90 days Inhibrx is expected to under-perform the OmniAb. But the stock apears to be less risky and, when comparing its historical volatility, Inhibrx is 4.56 times less risky than OmniAb. The stock trades about -0.01 of its potential returns per unit of risk. The OmniAb Inc is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  34.00  in OmniAb Inc on December 29, 2024 and sell it today you would lose (3.00) from holding OmniAb Inc or give up 8.82% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	63.93%
Values	Daily Returns

Inhibrx  vs.  OmniAb 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.

OmniAb Inc

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in OmniAb Inc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating forward indicators, OmniAb showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Inhibrx and OmniAb

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

The idea behind Inhibrx and OmniAb 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.

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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.