Correlation Between Summit Materials and Inhibrx
Can any of the company-specific risk be diversified away by investing in both Summit Materials 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 Summit Materials and Inhibrx into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Summit Materials and Inhibrx, you can compare the effects of market volatilities on Summit Materials 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 Summit Materials with a short position of Inhibrx. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Materials and Inhibrx.
Diversification Opportunities for Summit Materials and Inhibrx
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Summit and Inhibrx is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Summit Materials and Inhibrx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inhibrx and Summit Materials 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 Summit Materials 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 Summit Materials i.e., Summit Materials and Inhibrx go up and down completely randomly.
Pair Corralation between Summit Materials and Inhibrx
Considering the 90-day investment horizon Summit Materials is expected to generate 0.43 times more return on investment than Inhibrx. However, Summit Materials is 2.35 times less risky than Inhibrx. It trades about 0.09 of its potential returns per unit of risk. Inhibrx is currently generating about 0.01 per unit of risk. If you would invest 2,634 in Summit Materials on November 28, 2024 and sell it today you would earn a total of 2,615 from holding Summit Materials or generate 99.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 97.89% |
| Values | Daily Returns |
Summit Materials vs. Inhibrx
Performance |
| Timeline |
| Summit Materials |
Risk-Adjusted Performance
Good
Weak | Strong |
| Inhibrx |
Summit Materials and Inhibrx Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summit Materials and Inhibrx
The main advantage of trading using opposite Summit Materials and Inhibrx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Materials 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.| Summit Materials vs. Martin Marietta Materials | Summit Materials vs. Vulcan Materials | Summit Materials vs. United States Lime | Summit Materials vs. James Hardie Industries |
| 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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