Correlation Between Inhibrx and DBV Technologies

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

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

Diversification Opportunities for Inhibrx and DBV Technologies

0.51

Correlation Coefficient

Inhibrx  DBV Technologies

Very weak diversification

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

Pair Corralation between Inhibrx and DBV Technologies

Given the investment horizon of 90 days Inhibrx is expected to generate 0.44 times more return on investment than DBV Technologies. However, Inhibrx is 2.29 times less risky than DBV Technologies. It trades about 0.02 of its potential returns per unit of risk. DBV Technologies is currently generating about 0.01 per unit of risk. If you would invest  1,508  in Inhibrx on September 12, 2024 and sell it today you would earn a total of  4.00  from holding Inhibrx or generate 0.27% return on investment over 90 days.

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

Inhibrx  vs.  DBV Technologies

Inhibrx

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Inhibrx are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

DBV Technologies

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days DBV Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, DBV Technologies is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Inhibrx and DBV Technologies

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

The idea behind Inhibrx and DBV Technologies 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.