Correlation Between BCE and Inhibrx
Can any of the company-specific risk be diversified away by investing in both BCE 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 BCE and Inhibrx into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BCE Inc and Inhibrx, you can compare the effects of market volatilities on BCE 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 BCE with a short position of Inhibrx. Check out your portfolio center. Please also check ongoing floating volatility patterns of BCE and Inhibrx.
Diversification Opportunities for BCE and Inhibrx
Weak diversification
The 3 months correlation between BCE and Inhibrx is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding BCE Inc and Inhibrx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inhibrx and BCE 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 BCE 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 BCE i.e., BCE and Inhibrx go up and down completely randomly.
Pair Corralation between BCE and Inhibrx
Considering the 90-day investment horizon BCE Inc is expected to generate 0.53 times more return on investment than Inhibrx. However, BCE Inc is 1.89 times less risky than Inhibrx. It trades about -0.1 of its potential returns per unit of risk. Inhibrx is currently generating about -0.08 per unit of risk. If you would invest 2,629 in BCE Inc on November 29, 2024 and sell it today you would lose (290.00) from holding BCE Inc or give up 11.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BCE Inc vs. Inhibrx
Performance |
| Timeline |
| BCE Inc |
| Inhibrx |
BCE and Inhibrx Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BCE and Inhibrx
The main advantage of trading using opposite BCE and Inhibrx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BCE 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.| BCE vs. Rogers Communications | BCE vs. America Movil SAB | BCE vs. Telus Corp | BCE vs. Telefonica Brasil SA |
| 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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