Correlation Between Inhibrx and Traws Pharma
Can any of the company-specific risk be diversified away by investing in both Inhibrx and Traws Pharma 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 Traws Pharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inhibrx and Traws Pharma, you can compare the effects of market volatilities on Inhibrx and Traws Pharma 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 Traws Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inhibrx and Traws Pharma.
Diversification Opportunities for Inhibrx and Traws Pharma
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Inhibrx and Traws is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Inhibrx and Traws Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Traws Pharma 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 Traws Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Traws Pharma has no effect on the direction of Inhibrx i.e., Inhibrx and Traws Pharma go up and down completely randomly.
Pair Corralation between Inhibrx and Traws Pharma
Given the investment horizon of 90 days Inhibrx is expected to under-perform the Traws Pharma. But the stock apears to be less risky and, when comparing its historical volatility, Inhibrx is 7.16 times less risky than Traws Pharma. The stock trades about -0.08 of its potential returns per unit of risk. The Traws Pharma is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 474.00 in Traws Pharma on October 16, 2024 and sell it today you would earn a total of 259.00 from holding Traws Pharma or generate 54.64% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Inhibrx vs. Traws Pharma
Performance |
Timeline |
Inhibrx |
Traws Pharma |
Inhibrx and Traws Pharma Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Inhibrx and Traws Pharma
The main advantage of trading using opposite Inhibrx and Traws Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inhibrx position performs unexpectedly, Traws Pharma 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 Traws Pharma will offset losses from the drop in Traws Pharma's long position.Inhibrx vs. Crinetics Pharmaceuticals | ||
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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