Correlation Between 512807AW8 and Inhibrx

Can any of the company-specific risk be diversified away by investing in both 512807AW8 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 512807AW8 and Inhibrx into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between LAM RESEARCH PORATION and Inhibrx, you can compare the effects of market volatilities on 512807AW8 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 512807AW8 with a short position of Inhibrx. Check out your portfolio center. Please also check ongoing floating volatility patterns of 512807AW8 and Inhibrx.

Diversification Opportunities for 512807AW8 and Inhibrx

0.2

Correlation Coefficient

512807AW8  Inhibrx

Modest diversification

The 3 months correlation between 512807AW8 and Inhibrx is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding LAM RESEARCH PORATION and Inhibrx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inhibrx and 512807AW8 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 LAM RESEARCH PORATION 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 512807AW8 i.e., 512807AW8 and Inhibrx go up and down completely randomly.

Pair Corralation between 512807AW8 and Inhibrx

Assuming the 90 days trading horizon LAM RESEARCH PORATION is expected to generate 15.05 times more return on investment than Inhibrx. However, 512807AW8 is 15.05 times more volatile than Inhibrx. It trades about 0.06 of its potential returns per unit of risk. Inhibrx is currently generating about 0.01 per unit of risk. If you would invest  7,173  in LAM RESEARCH PORATION on October 11, 2024 and sell it today you would lose (216.00) from holding LAM RESEARCH PORATION or give up 3.01% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	87.88%
Values	Daily Returns

LAM RESEARCH PORATION  vs.  Inhibrx

LAM RESEARCH PORATION

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LAM RESEARCH PORATION has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 512807AW8 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 512807AW8 and Inhibrx

The main advantage of trading using opposite 512807AW8 and Inhibrx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 512807AW8 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 LAM RESEARCH PORATION 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.