Correlation Between Inhibrx and Amgen

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

By analyzing existing cross correlation between Inhibrx and Amgen Inc, you can compare the effects of market volatilities on Inhibrx and Amgen 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 Amgen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inhibrx and Amgen.

Diversification Opportunities for Inhibrx and Amgen

0.51

Correlation Coefficient

Inhibrx  Amgen

Very weak diversification

The 3 months correlation between Inhibrx and Amgen is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Inhibrx and Amgen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amgen Inc 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 Amgen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amgen Inc has no effect on the direction of Inhibrx i.e., Inhibrx and Amgen go up and down completely randomly.

Pair Corralation between Inhibrx and Amgen

Given the investment horizon of 90 days Inhibrx is expected to generate 1.44 times more return on investment than Amgen. However, Inhibrx is 1.44 times more volatile than Amgen Inc. It trades about -0.05 of its potential returns per unit of risk. Amgen Inc is currently generating about -0.23 per unit of risk. If you would invest  1,603  in Inhibrx on September 1, 2024 and sell it today you would lose (77.00) from holding Inhibrx or give up 4.8% of portfolio value over 90 days.

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

Inhibrx  vs.  Amgen Inc

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.

Amgen Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amgen Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in December 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Inhibrx and Amgen

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

The idea behind Inhibrx and Amgen 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.