Correlation Between Inhibrx and SAB Biotherapeutics

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

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

Diversification Opportunities for Inhibrx and SAB Biotherapeutics

0.61

Correlation Coefficient

Inhibrx  SAB Biotherapeutics

Poor diversification

The 3 months correlation between Inhibrx and SAB is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Inhibrx and SAB Biotherapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAB Biotherapeutics 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 SAB Biotherapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SAB Biotherapeutics has no effect on the direction of Inhibrx i.e., Inhibrx and SAB Biotherapeutics go up and down completely randomly.

Pair Corralation between Inhibrx and SAB Biotherapeutics

Given the investment horizon of 90 days Inhibrx is expected to under-perform the SAB Biotherapeutics. But the stock apears to be less risky and, when comparing its historical volatility, Inhibrx is 3.41 times less risky than SAB Biotherapeutics. The stock trades about -0.05 of its potential returns per unit of risk. The SAB Biotherapeutics is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  281.00  in SAB Biotherapeutics on December 1, 2024 and sell it today you would lose (110.00) from holding SAB Biotherapeutics or give up 39.15% of portfolio value over 90 days.

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

Inhibrx  vs.  SAB Biotherapeutics

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 latest weak performance, the Stock's fundamental drivers remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

SAB Biotherapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days SAB Biotherapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's fundamental drivers remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Inhibrx and SAB Biotherapeutics

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

The idea behind Inhibrx and SAB Biotherapeutics 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.