Correlation Between In8bio and Instil Bio

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

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

Diversification Opportunities for In8bio and Instil Bio

-0.45

Correlation Coefficient

In8bio  Instil Bio

Very good diversification

The 3 months correlation between In8bio and Instil is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding In8bio Inc and Instil Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Instil Bio and In8bio 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 In8bio Inc are associated (or correlated) with Instil Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Instil Bio has no effect on the direction of In8bio i.e., In8bio and Instil Bio go up and down completely randomly.

Pair Corralation between In8bio and Instil Bio

Given the investment horizon of 90 days In8bio Inc is expected to generate 0.83 times more return on investment than Instil Bio. However, In8bio Inc is 1.2 times less risky than Instil Bio. It trades about 0.1 of its potential returns per unit of risk. Instil Bio is currently generating about -0.1 per unit of risk. If you would invest  27.00  in In8bio Inc on August 31, 2024 and sell it today you would earn a total of  3.00  from holding In8bio Inc or generate 11.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.65%
Values	Daily Returns

In8bio Inc  vs.  Instil Bio

In8bio Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days In8bio Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Instil Bio

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Instil Bio are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite weak forward indicators, Instil Bio disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with In8bio and Instil Bio

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

The idea behind In8bio Inc and Instil Bio 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.