Correlation Between Treasury Wine and Inhibrx

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

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

Diversification Opportunities for Treasury Wine and Inhibrx

0.06

Correlation Coefficient

Treasury Wine  Inhibrx

Significant diversification

The 3 months correlation between Treasury and Inhibrx is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Treasury Wine Estates and Inhibrx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inhibrx and Treasury Wine 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 Treasury Wine Estates 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 Treasury Wine i.e., Treasury Wine and Inhibrx go up and down completely randomly.

Pair Corralation between Treasury Wine and Inhibrx

Assuming the 90 days horizon Treasury Wine Estates is expected to under-perform the Inhibrx. But the pink sheet apears to be less risky and, when comparing its historical volatility, Treasury Wine Estates is 1.5 times less risky than Inhibrx. The pink sheet trades about -0.11 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  1,514  in Inhibrx on December 30, 2024 and sell it today you would lose (102.00) from holding Inhibrx or give up 6.74% of portfolio value over 90 days.

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

Treasury Wine Estates  vs.  Inhibrx

Treasury Wine Estates

Risk-Adjusted Performance

Very Weak

Over the last 90 days Treasury Wine Estates has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Inhibrx

Risk-Adjusted Performance

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

Pair Trading with Treasury Wine and Inhibrx

The main advantage of trading using opposite Treasury Wine and Inhibrx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Treasury Wine 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 Treasury Wine Estates 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.