Correlation Between Tokyo Electron and Inhibrx

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

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

Diversification Opportunities for Tokyo Electron and Inhibrx

-0.35

Correlation Coefficient

Tokyo Electron  Inhibrx

Very good diversification

The 3 months correlation between Tokyo and Inhibrx is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Tokyo Electron and Inhibrx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inhibrx and Tokyo Electron 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 Tokyo Electron 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 Tokyo Electron i.e., Tokyo Electron and Inhibrx go up and down completely randomly.

Pair Corralation between Tokyo Electron and Inhibrx

Assuming the 90 days horizon Tokyo Electron is expected to under-perform the Inhibrx. But the pink sheet apears to be less risky and, when comparing its historical volatility, Tokyo Electron is 1.01 times less risky than Inhibrx. The pink sheet trades about -0.01 of its potential returns per unit of risk. The Inhibrx is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  1,388  in Inhibrx on December 19, 2024 and sell it today you would earn a total of  12.00  from holding Inhibrx or generate 0.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Tokyo Electron  vs.  Inhibrx

Tokyo Electron

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tokyo Electron has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable essential indicators, Tokyo Electron is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Inhibrx

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Inhibrx are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

Pair Trading with Tokyo Electron and Inhibrx

The main advantage of trading using opposite Tokyo Electron and Inhibrx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tokyo Electron 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 Tokyo Electron 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.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.