Correlation Between Inhibrx and ProMIS Neurosciences

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

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

Diversification Opportunities for Inhibrx and ProMIS Neurosciences

0.5

Correlation Coefficient

Inhibrx  ProMIS Neurosciences

Very weak diversification

The 3 months correlation between Inhibrx and ProMIS is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Inhibrx and ProMIS Neurosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProMIS Neurosciences 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 ProMIS Neurosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProMIS Neurosciences has no effect on the direction of Inhibrx i.e., Inhibrx and ProMIS Neurosciences go up and down completely randomly.

Pair Corralation between Inhibrx and ProMIS Neurosciences

Given the investment horizon of 90 days Inhibrx is expected to under-perform the ProMIS Neurosciences. But the stock apears to be less risky and, when comparing its historical volatility, Inhibrx is 1.51 times less risky than ProMIS Neurosciences. The stock trades about -0.09 of its potential returns per unit of risk. The ProMIS Neurosciences is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  106.00  in ProMIS Neurosciences on October 26, 2024 and sell it today you would lose (13.00) from holding ProMIS Neurosciences or give up 12.26% of portfolio value over 90 days.

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

Inhibrx  vs.  ProMIS Neurosciences

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 weak performance in the last few months, the Stock's fundamental drivers remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

ProMIS Neurosciences

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ProMIS Neurosciences has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's primary indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Inhibrx and ProMIS Neurosciences

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

The idea behind Inhibrx and ProMIS Neurosciences 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.