Correlation Between Inhibikase Therapeutics and GB Sciences
Can any of the company-specific risk be diversified away by investing in both Inhibikase Therapeutics and GB Sciences 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 Therapeutics and GB Sciences into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inhibikase Therapeutics and GB Sciences, you can compare the effects of market volatilities on Inhibikase Therapeutics and GB Sciences 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 Therapeutics with a short position of GB Sciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inhibikase Therapeutics and GB Sciences.
Diversification Opportunities for Inhibikase Therapeutics and GB Sciences
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Inhibikase and GBLX is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Inhibikase Therapeutics and GB Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GB Sciences and Inhibikase Therapeutics 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 Therapeutics are associated (or correlated) with GB Sciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GB Sciences has no effect on the direction of Inhibikase Therapeutics i.e., Inhibikase Therapeutics and GB Sciences go up and down completely randomly.
Pair Corralation between Inhibikase Therapeutics and GB Sciences
Considering the 90-day investment horizon Inhibikase Therapeutics is expected to generate 36.34 times less return on investment than GB Sciences. But when comparing it to its historical volatility, Inhibikase Therapeutics is 10.63 times less risky than GB Sciences. It trades about 0.02 of its potential returns per unit of risk. GB Sciences is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1.08 in GB Sciences on September 2, 2024 and sell it today you would lose (0.58) from holding GB Sciences or give up 53.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inhibikase Therapeutics vs. GB Sciences
Performance |
| Timeline |
| Inhibikase Therapeutics |
| GB Sciences |
Inhibikase Therapeutics and GB Sciences Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inhibikase Therapeutics and GB Sciences
The main advantage of trading using opposite Inhibikase Therapeutics and GB Sciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inhibikase Therapeutics position performs unexpectedly, GB Sciences 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 GB Sciences will offset losses from the drop in GB Sciences' long position.| Inhibikase Therapeutics vs. DiaMedica Therapeutics | Inhibikase Therapeutics vs. Milestone Pharmaceuticals | Inhibikase Therapeutics vs. Seres Therapeutics | Inhibikase Therapeutics vs. Oncolytics Biotech |
| GB Sciences vs. Antibe Therapeutics | GB Sciences vs. Awakn Life Sciences | GB Sciences vs. America Great Health | GB Sciences vs. Therasense |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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