Correlation Between Western Union and Inhibrx

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

By analyzing existing cross correlation between Western Union Co and Inhibrx, you can compare the effects of market volatilities on Western Union and Inhibrx 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 Western Union with a short position of Inhibrx. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Union and Inhibrx.

Diversification Opportunities for Western Union and Inhibrx

0.39

Correlation Coefficient

Western Union  Inhibrx

Weak diversification

The 3 months correlation between Western and Inhibrx is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Western Union Co and Inhibrx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inhibrx and Western Union 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 Western Union Co are associated (or correlated) with Inhibrx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inhibrx has no effect on the direction of Western Union i.e., Western Union and Inhibrx go up and down completely randomly.

Pair Corralation between Western Union and Inhibrx

Allowing for the 90-day total investment horizon Western Union Co is expected to under-perform the Inhibrx. But the stock apears to be less risky and, when comparing its historical volatility, Western Union Co is 2.35 times less risky than Inhibrx. The stock trades about -0.04 of its potential returns per unit of risk. The Inhibrx is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  1,514  in Inhibrx on September 19, 2024 and sell it today you would lose (19.00) from holding Inhibrx or give up 1.25% of portfolio value over 90 days.

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

Western Union Co  vs.  Inhibrx

Western Union

Risk-Adjusted Performance

0 of 100

Very Weak

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

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.

Pair Trading with Western Union and Inhibrx

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

The idea behind Western Union Co and Inhibrx 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.