Correlation Between In8bioInc and ImmunomeInc

Can any of the company-specific risk be diversified away by investing in both In8bioInc and ImmunomeInc 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 In8bioInc and ImmunomeInc into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between In8bioInc and ImmunomeInc, you can compare the effects of market volatilities on In8bioInc and ImmunomeInc 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 In8bioInc with a short position of ImmunomeInc. Check out your portfolio center. Please also check ongoing floating volatility patterns of In8bioInc and ImmunomeInc.

Diversification Opportunities for In8bioInc and ImmunomeInc

0.58

Correlation Coefficient

In8bioInc  ImmunomeInc

Very weak diversification

The 3 months correlation between In8bioInc and ImmunomeInc is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding In8bioInc and ImmunomeInc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ImmunomeInc and In8bioInc 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 In8bioInc are associated (or correlated) with ImmunomeInc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ImmunomeInc has no effect on the direction of In8bioInc i.e., In8bioInc and ImmunomeInc go up and down completely randomly.

Pair Corralation between In8bioInc and ImmunomeInc

Given the investment horizon of 90 days In8bioInc is expected to generate 1.98 times less return on investment than ImmunomeInc. In addition to that, In8bioInc is 1.58 times more volatile than ImmunomeInc. It trades about 0.04 of its total potential returns per unit of risk. ImmunomeInc is currently generating about 0.11 per unit of volatility. If you would invest  824.00  in ImmunomeInc on February 9, 2024 and sell it today you would earn a total of  709.00  from holding ImmunomeInc or generate 86.04% return on investment over 90 days.

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

In8bioInc  vs.  ImmunomeInc

In8bioInc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days In8bioInc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

ImmunomeInc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ImmunomeInc 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 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 In8bioInc and ImmunomeInc

The main advantage of trading using opposite In8bioInc and ImmunomeInc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if In8bioInc position performs unexpectedly, ImmunomeInc 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 ImmunomeInc will offset losses from the drop in ImmunomeInc's long position.

The idea behind In8bioInc and ImmunomeInc 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.