Correlation Between Inhibrx and Estrella Immunopharma

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

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

Diversification Opportunities for Inhibrx and Estrella Immunopharma

-0.02

Correlation Coefficient

Inhibrx  Estrella Immunopharma

Good diversification

The 3 months correlation between Inhibrx and Estrella is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Inhibrx and Estrella Immunopharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Estrella Immunopharma 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 Estrella Immunopharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Estrella Immunopharma has no effect on the direction of Inhibrx i.e., Inhibrx and Estrella Immunopharma go up and down completely randomly.

Pair Corralation between Inhibrx and Estrella Immunopharma

Given the investment horizon of 90 days Inhibrx is expected to generate 5.14 times more return on investment than Estrella Immunopharma. However, Inhibrx is 5.14 times more volatile than Estrella Immunopharma. It trades about -0.04 of its potential returns per unit of risk. Estrella Immunopharma is currently generating about -0.58 per unit of risk. If you would invest  1,629  in Inhibrx on August 31, 2024 and sell it today you would lose (66.00) from holding Inhibrx or give up 4.05% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	13.64%
Values	Daily Returns

Inhibrx  vs.  Estrella Immunopharma

Inhibrx

Risk-Adjusted Performance

0 of 100

Insignificant

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.

Estrella Immunopharma

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days Estrella Immunopharma has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly unsteady basic indicators, Estrella Immunopharma showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Inhibrx and Estrella Immunopharma

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

The idea behind Inhibrx and Estrella Immunopharma 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.