Correlation Between Amgen and Inhibrx
Can any of the company-specific risk be diversified away by investing in both Amgen 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 Amgen and Inhibrx into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amgen Inc and Inhibrx, you can compare the effects of market volatilities on Amgen 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 Amgen with a short position of Inhibrx. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amgen and Inhibrx.
Diversification Opportunities for Amgen and Inhibrx
Very weak diversification
The 3 months correlation between Amgen and Inhibrx is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Amgen Inc and Inhibrx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inhibrx and Amgen 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 Amgen Inc 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 Amgen i.e., Amgen and Inhibrx go up and down completely randomly.
Pair Corralation between Amgen and Inhibrx
Given the investment horizon of 90 days Amgen Inc is expected to under-perform the Inhibrx. But the stock apears to be less risky and, when comparing its historical volatility, Amgen Inc is 1.6 times less risky than Inhibrx. The stock trades about -0.17 of its potential returns per unit of risk. The Inhibrx is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 1,566 in Inhibrx on August 30, 2024 and sell it today you would lose (21.00) from holding Inhibrx or give up 1.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 97.73% |
| Values | Daily Returns |
Amgen Inc vs. Inhibrx
Performance |
| Timeline |
| Amgen Inc |
| Inhibrx |
Amgen and Inhibrx Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amgen and Inhibrx
The main advantage of trading using opposite Amgen and Inhibrx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amgen 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 Amgen Inc 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.| Inhibrx vs. Crinetics Pharmaceuticals | Inhibrx vs. Merus BV | Inhibrx vs. Lyell Immunopharma | Inhibrx vs. Kronos Bio |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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