Correlation Between NextCure and Inhibrx

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

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

Diversification Opportunities for NextCure and Inhibrx

0.58

Correlation Coefficient

NextCure  Inhibrx

Very weak diversification

The 3 months correlation between NextCure and Inhibrx is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding NextCure and Inhibrx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inhibrx and NextCure 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 NextCure are associated (or correlated) with Inhibrx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inhibrx has no effect on the direction of NextCure i.e., NextCure and Inhibrx go up and down completely randomly.

Pair Corralation between NextCure and Inhibrx

Given the investment horizon of 90 days NextCure is expected to under-perform the Inhibrx. In addition to that, NextCure is 1.58 times more volatile than Inhibrx. It trades about -0.26 of its total potential returns per unit of risk. Inhibrx is currently generating about -0.02 per unit of volatility. If you would invest  1,486  in Inhibrx on September 24, 2024 and sell it today you would lose (26.00) from holding Inhibrx or give up 1.75% of portfolio value over 90 days.

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

NextCure  vs.  Inhibrx

NextCure

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NextCure has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

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.

Pair Trading with NextCure and Inhibrx

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

The idea behind NextCure and Inhibrx 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.