Correlation Between InhibrxInc and BiocardiaInc

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

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

Diversification Opportunities for InhibrxInc and BiocardiaInc

0.67

Correlation Coefficient

InhibrxInc  BiocardiaInc

Poor diversification

The 3 months correlation between InhibrxInc and BiocardiaInc is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding InhibrxInc and BiocardiaInc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BiocardiaInc and InhibrxInc 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 InhibrxInc are associated (or correlated) with BiocardiaInc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BiocardiaInc has no effect on the direction of InhibrxInc i.e., InhibrxInc and BiocardiaInc go up and down completely randomly.

Pair Corralation between InhibrxInc and BiocardiaInc

Given the investment horizon of 90 days InhibrxInc is expected to generate 0.16 times more return on investment than BiocardiaInc. However, InhibrxInc is 6.28 times less risky than BiocardiaInc. It trades about -0.15 of its potential returns per unit of risk. BiocardiaInc is currently generating about -0.02 per unit of risk. If you would invest  3,470  in InhibrxInc on February 7, 2024 and sell it today you would lose (55.00) from holding InhibrxInc or give up 1.59% of portfolio value over 90 days.

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

InhibrxInc  vs.  BiocardiaInc

InhibrxInc

Risk-Adjusted Performance

0 of 100

Very Weak

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

BiocardiaInc

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with InhibrxInc and BiocardiaInc

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

The idea behind InhibrxInc and BiocardiaInc 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.