Correlation Between In8bio and Avidity Biosciences

Can any of the company-specific risk be diversified away by investing in both In8bio and Avidity Biosciences 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 In8bio and Avidity Biosciences into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between In8bio Inc and Avidity Biosciences, you can compare the effects of market volatilities on In8bio and Avidity Biosciences 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 In8bio with a short position of Avidity Biosciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of In8bio and Avidity Biosciences.

Diversification Opportunities for In8bio and Avidity Biosciences

-0.73

Correlation Coefficient

In8bio  Avidity Biosciences

Pay attention - limited upside

The 3 months correlation between In8bio and Avidity is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding In8bio Inc and Avidity Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avidity Biosciences and In8bio 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 In8bio Inc are associated (or correlated) with Avidity Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avidity Biosciences has no effect on the direction of In8bio i.e., In8bio and Avidity Biosciences go up and down completely randomly.

Pair Corralation between In8bio and Avidity Biosciences

Given the investment horizon of 90 days In8bio Inc is expected to under-perform the Avidity Biosciences. But the stock apears to be less risky and, when comparing its historical volatility, In8bio Inc is 1.35 times less risky than Avidity Biosciences. The stock trades about 0.0 of its potential returns per unit of risk. The Avidity Biosciences is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  4,723  in Avidity Biosciences on September 2, 2025 and sell it today you would earn a total of  2,406  from holding Avidity Biosciences or generate 50.94% return on investment over 90 days.

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

In8bio Inc  vs.  Avidity Biosciences

In8bio Inc

Risk-Adjusted Performance

Weakest

Over the last 90 days In8bio Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, In8bio is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Avidity Biosciences

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Avidity Biosciences are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, Avidity Biosciences sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with In8bio and Avidity Biosciences

The main advantage of trading using opposite In8bio and Avidity Biosciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if In8bio position performs unexpectedly, Avidity Biosciences 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 Avidity Biosciences will offset losses from the drop in Avidity Biosciences' long position.

The idea behind In8bio Inc and Avidity Biosciences 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.

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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.