Correlation Between Inhibrx and Xilio Development

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

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

Diversification Opportunities for Inhibrx and Xilio Development

0.03

Correlation Coefficient

Inhibrx  Xilio Development

Significant diversification

The 3 months correlation between Inhibrx and Xilio is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Inhibrx and Xilio Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xilio Development 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 Xilio Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xilio Development has no effect on the direction of Inhibrx i.e., Inhibrx and Xilio Development go up and down completely randomly.

Pair Corralation between Inhibrx and Xilio Development

Given the investment horizon of 90 days Inhibrx is expected to under-perform the Xilio Development. But the stock apears to be less risky and, when comparing its historical volatility, Inhibrx is 2.66 times less risky than Xilio Development. The stock trades about -0.01 of its potential returns per unit of risk. The Xilio Development is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  74.00  in Xilio Development on September 3, 2024 and sell it today you would earn a total of  30.00  from holding Xilio Development or generate 40.54% return on investment over 90 days.

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

Inhibrx  vs.  Xilio Development

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 latest stock price disturbance, may contribute to short-term losses for the investors.

Xilio Development

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Xilio Development are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady essential indicators, Xilio Development displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Inhibrx and Xilio Development

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

The idea behind Inhibrx and Xilio Development 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.