Correlation Between AMERICAN and Inhibrx

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

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

Diversification Opportunities for AMERICAN and Inhibrx

-0.05

Correlation Coefficient

AMERICAN  Inhibrx

Good diversification

The 3 months correlation between AMERICAN and Inhibrx is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding AMERICAN TOWER P and Inhibrx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inhibrx and AMERICAN 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 AMERICAN TOWER P 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 AMERICAN i.e., AMERICAN and Inhibrx go up and down completely randomly.

Pair Corralation between AMERICAN and Inhibrx

Assuming the 90 days trading horizon AMERICAN TOWER P is expected to under-perform the Inhibrx. But the bond apears to be less risky and, when comparing its historical volatility, AMERICAN TOWER P is 7.79 times less risky than Inhibrx. The bond trades about -0.01 of its potential returns per unit of risk. The Inhibrx is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  2,418  in Inhibrx on October 11, 2024 and sell it today you would lose (920.00) from holding Inhibrx or give up 38.05% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	94.56%
Values	Daily Returns

AMERICAN TOWER P  vs.  Inhibrx

AMERICAN TOWER P

Risk-Adjusted Performance

0 of 100

Very Weak

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

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

Pair Trading with AMERICAN and Inhibrx

The main advantage of trading using opposite AMERICAN and Inhibrx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMERICAN 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 AMERICAN TOWER P 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.