Correlation Between Inhibikase TherapeuticsInc and Amarin PLC

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

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

Diversification Opportunities for Inhibikase TherapeuticsInc and Amarin PLC

0.25

Correlation Coefficient

Inhibikase TherapeuticsInc  Amarin PLC

Modest diversification

The 3 months correlation between Inhibikase and Amarin is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Inhibikase TherapeuticsInc and Amarin PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amarin PLC and Inhibikase TherapeuticsInc 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 Inhibikase TherapeuticsInc are associated (or correlated) with Amarin PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amarin PLC has no effect on the direction of Inhibikase TherapeuticsInc i.e., Inhibikase TherapeuticsInc and Amarin PLC go up and down completely randomly.

Pair Corralation between Inhibikase TherapeuticsInc and Amarin PLC

Considering the 90-day investment horizon Inhibikase TherapeuticsInc is expected to under-perform the Amarin PLC. In addition to that, Inhibikase TherapeuticsInc is 2.34 times more volatile than Amarin PLC. It trades about -0.17 of its total potential returns per unit of risk. Amarin PLC is currently generating about -0.08 per unit of volatility. If you would invest  107.00  in Amarin PLC on February 7, 2024 and sell it today you would lose (9.00) from holding Amarin PLC or give up 8.41% of portfolio value over 90 days.

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

Inhibikase TherapeuticsInc  vs.  Amarin PLC

Inhibikase TherapeuticsInc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Inhibikase TherapeuticsInc 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 forward-looking signals remain comparatively stable which may send shares a bit higher in June 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Amarin PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amarin PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in June 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Inhibikase TherapeuticsInc and Amarin PLC

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

The idea behind Inhibikase TherapeuticsInc and Amarin PLC 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.