Correlation Between Inhibrx and Acumen Pharmaceuticals

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

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

Diversification Opportunities for Inhibrx and Acumen Pharmaceuticals

0.31

Correlation Coefficient

Inhibrx  Acumen Pharmaceuticals

Weak diversification

The 3 months correlation between Inhibrx and Acumen is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Inhibrx and Acumen Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acumen Pharmaceuticals and Inhibrx 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 Inhibrx are associated (or correlated) with Acumen Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acumen Pharmaceuticals has no effect on the direction of Inhibrx i.e., Inhibrx and Acumen Pharmaceuticals go up and down completely randomly.

Pair Corralation between Inhibrx and Acumen Pharmaceuticals

Given the investment horizon of 90 days Inhibrx is expected to under-perform the Acumen Pharmaceuticals. But the stock apears to be less risky and, when comparing its historical volatility, Inhibrx is 1.55 times less risky than Acumen Pharmaceuticals. The stock trades about -0.02 of its potential returns per unit of risk. The Acumen Pharmaceuticals is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  240.00  in Acumen Pharmaceuticals on September 4, 2024 and sell it today you would lose (5.00) from holding Acumen Pharmaceuticals or give up 2.08% of portfolio value over 90 days.

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

Inhibrx  vs.  Acumen Pharmaceuticals

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.

Acumen Pharmaceuticals

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Acumen Pharmaceuticals are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Acumen Pharmaceuticals is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Inhibrx and Acumen Pharmaceuticals

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

The idea behind Inhibrx and Acumen Pharmaceuticals 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.