Correlation Between Inhibrx and Reviva Pharmaceuticals

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

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

Diversification Opportunities for Inhibrx and Reviva Pharmaceuticals

-0.29

Correlation Coefficient

Inhibrx  Reviva Pharmaceuticals

Very good diversification

The 3 months correlation between Inhibrx and Reviva is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Inhibrx and Reviva Pharmaceuticals Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reviva Pharmaceuticals 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 Reviva Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reviva Pharmaceuticals has no effect on the direction of Inhibrx i.e., Inhibrx and Reviva Pharmaceuticals go up and down completely randomly.

Pair Corralation between Inhibrx and Reviva Pharmaceuticals

Given the investment horizon of 90 days Inhibrx is expected to under-perform the Reviva Pharmaceuticals. But the stock apears to be less risky and, when comparing its historical volatility, Inhibrx is 10.89 times less risky than Reviva Pharmaceuticals. The stock trades about -0.04 of its potential returns per unit of risk. The Reviva Pharmaceuticals Holdings is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  21.00  in Reviva Pharmaceuticals Holdings on September 26, 2024 and sell it today you would lose (8.00) from holding Reviva Pharmaceuticals Holdings or give up 38.1% of portfolio value over 90 days.

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

Inhibrx  vs.  Reviva Pharmaceuticals Holding

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

Reviva Pharmaceuticals

Risk-Adjusted Performance

5 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Reviva Pharmaceuticals Holdings are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady technical indicators, Reviva Pharmaceuticals showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Inhibrx and Reviva Pharmaceuticals

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

The idea behind Inhibrx and Reviva Pharmaceuticals Holdings 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.