Correlation Between Inhibrx and HONEYWELL

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

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

Diversification Opportunities for Inhibrx and HONEYWELL

0.34

Correlation Coefficient

Inhibrx  HONEYWELL

Weak diversification

The 3 months correlation between Inhibrx and HONEYWELL is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Inhibrx and HONEYWELL INTL INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HONEYWELL INTL 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 HONEYWELL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HONEYWELL INTL INC has no effect on the direction of Inhibrx i.e., Inhibrx and HONEYWELL go up and down completely randomly.

Pair Corralation between Inhibrx and HONEYWELL

Given the investment horizon of 90 days Inhibrx is expected to generate 5.72 times less return on investment than HONEYWELL. In addition to that, Inhibrx is 2.99 times more volatile than HONEYWELL INTL INC. It trades about 0.01 of its total potential returns per unit of risk. HONEYWELL INTL INC is currently generating about 0.16 per unit of volatility. If you would invest  7,699  in HONEYWELL INTL INC on December 25, 2024 and sell it today you would earn a total of  420.00  from holding HONEYWELL INTL INC or generate 5.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	49.15%
Values	Daily Returns

Inhibrx  vs.  HONEYWELL INTL INC

Inhibrx

Risk-Adjusted Performance

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

HONEYWELL INTL INC

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in HONEYWELL INTL INC are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, HONEYWELL may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Inhibrx and HONEYWELL

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

The idea behind Inhibrx and HONEYWELL INTL 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.

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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.