Correlation Between Inhibrx and CERo Therapeutics

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

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

Diversification Opportunities for Inhibrx and CERo Therapeutics

-0.55

Correlation Coefficient

Inhibrx  CERo Therapeutics

Excellent diversification

The 3 months correlation between Inhibrx and CERo is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Inhibrx and CERo Therapeutics Holdings, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CERo Therapeutics 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 CERo Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CERo Therapeutics has no effect on the direction of Inhibrx i.e., Inhibrx and CERo Therapeutics go up and down completely randomly.

Pair Corralation between Inhibrx and CERo Therapeutics

Given the investment horizon of 90 days Inhibrx is expected to generate 0.17 times more return on investment than CERo Therapeutics. However, Inhibrx is 5.97 times less risky than CERo Therapeutics. It trades about 0.02 of its potential returns per unit of risk. CERo Therapeutics Holdings, is currently generating about 0.0 per unit of risk. If you would invest  1,419  in Inhibrx on September 14, 2024 and sell it today you would earn a total of  43.00  from holding Inhibrx or generate 3.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.21%
Values	Daily Returns

Inhibrx  vs.  CERo Therapeutics Holdings,

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 weak performance in the last few months, the Stock's fundamental drivers remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

CERo Therapeutics

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CERo Therapeutics Holdings, are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, CERo Therapeutics displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Inhibrx and CERo Therapeutics

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

The idea behind Inhibrx and CERo Therapeutics Holdings, 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.