Correlation Between Viemed Healthcare and Inhibrx

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

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

Diversification Opportunities for Viemed Healthcare and Inhibrx

0.4

Correlation Coefficient

Viemed Healthcare  Inhibrx

Very weak diversification

The 3 months correlation between Viemed and Inhibrx is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Viemed Healthcare and Inhibrx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inhibrx and Viemed Healthcare 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 Viemed Healthcare 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 Viemed Healthcare i.e., Viemed Healthcare and Inhibrx go up and down completely randomly.

Pair Corralation between Viemed Healthcare and Inhibrx

Considering the 90-day investment horizon Viemed Healthcare is expected to generate 0.71 times more return on investment than Inhibrx. However, Viemed Healthcare is 1.41 times less risky than Inhibrx. It trades about 0.1 of its potential returns per unit of risk. Inhibrx is currently generating about 0.07 per unit of risk. If you would invest  630.00  in Viemed Healthcare on October 7, 2024 and sell it today you would earn a total of  182.00  from holding Viemed Healthcare or generate 28.89% return on investment over 90 days.

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

Viemed Healthcare  vs.  Inhibrx

Viemed Healthcare

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Viemed Healthcare has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound primary indicators, Viemed Healthcare is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Inhibrx

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Inhibrx are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak fundamental drivers, Inhibrx may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Viemed Healthcare and Inhibrx

The main advantage of trading using opposite Viemed Healthcare and Inhibrx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Viemed Healthcare 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 Viemed Healthcare 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.