Correlation Between Inhibrx and CONSTELLATION

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

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

Diversification Opportunities for Inhibrx and CONSTELLATION

0.05

Correlation Coefficient

Inhibrx  CONSTELLATION

Significant diversification

The 3 months correlation between Inhibrx and CONSTELLATION is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Inhibrx and CONSTELLATION BRANDS INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CONSTELLATION BRANDS 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 CONSTELLATION. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CONSTELLATION BRANDS INC has no effect on the direction of Inhibrx i.e., Inhibrx and CONSTELLATION go up and down completely randomly.

Pair Corralation between Inhibrx and CONSTELLATION

Given the investment horizon of 90 days Inhibrx is expected to generate 8.36 times more return on investment than CONSTELLATION. However, Inhibrx is 8.36 times more volatile than CONSTELLATION BRANDS INC. It trades about 0.01 of its potential returns per unit of risk. CONSTELLATION BRANDS INC is currently generating about -0.01 per unit of risk. If you would invest  2,304  in Inhibrx on October 10, 2024 and sell it today you would lose (753.00) from holding Inhibrx or give up 32.68% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.79%
Values	Daily Returns

Inhibrx  vs.  CONSTELLATION BRANDS INC

Inhibrx

Risk-Adjusted Performance

0 of 100

Insignificant

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 current stock price disturbance, may contribute to short-term losses for the investors.

CONSTELLATION BRANDS INC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CONSTELLATION BRANDS INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, CONSTELLATION is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Inhibrx and CONSTELLATION

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

The idea behind Inhibrx and CONSTELLATION BRANDS 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..