Correlation Between Viking Therapeutics and In8bio

Can any of the company-specific risk be diversified away by investing in both Viking Therapeutics and In8bio 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 Viking Therapeutics and In8bio into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Viking Therapeutics and In8bio Inc, you can compare the effects of market volatilities on Viking Therapeutics and In8bio 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 Viking Therapeutics with a short position of In8bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Viking Therapeutics and In8bio.

Diversification Opportunities for Viking Therapeutics and In8bio

0.38

Correlation Coefficient

Viking Therapeutics  In8bio

Weak diversification

The 3 months correlation between Viking and In8bio is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Viking Therapeutics and In8bio Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on In8bio Inc and Viking Therapeutics 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 Viking Therapeutics are associated (or correlated) with In8bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of In8bio Inc has no effect on the direction of Viking Therapeutics i.e., Viking Therapeutics and In8bio go up and down completely randomly.

Pair Corralation between Viking Therapeutics and In8bio

Given the investment horizon of 90 days Viking Therapeutics is expected to under-perform the In8bio. But the stock apears to be less risky and, when comparing its historical volatility, Viking Therapeutics is 1.31 times less risky than In8bio. The stock trades about -0.12 of its potential returns per unit of risk. The In8bio Inc is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  27.00  in In8bio Inc on December 29, 2024 and sell it today you would lose (6.00) from holding In8bio Inc or give up 22.22% of portfolio value over 90 days.

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

Viking Therapeutics  vs.  In8bio Inc

Viking Therapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Viking Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

In8bio Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days In8bio Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Viking Therapeutics and In8bio

The main advantage of trading using opposite Viking Therapeutics and In8bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Viking Therapeutics position performs unexpectedly, In8bio 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 In8bio will offset losses from the drop in In8bio's long position.

The idea behind Viking Therapeutics and In8bio Inc 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.