Correlation Between Inhibrx and VistaGen Therapeutics

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

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

Diversification Opportunities for Inhibrx and VistaGen Therapeutics

-0.37

Correlation Coefficient

Inhibrx  VistaGen Therapeutics

Very good diversification

The 3 months correlation between Inhibrx and VistaGen is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Inhibrx and VistaGen Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VistaGen Therapeutics and Inhibrx 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 Inhibrx are associated (or correlated) with VistaGen Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VistaGen Therapeutics has no effect on the direction of Inhibrx i.e., Inhibrx and VistaGen Therapeutics go up and down completely randomly.

Pair Corralation between Inhibrx and VistaGen Therapeutics

Given the investment horizon of 90 days Inhibrx is expected to generate 1.76 times more return on investment than VistaGen Therapeutics. However, Inhibrx is 1.76 times more volatile than VistaGen Therapeutics. It trades about 0.25 of its potential returns per unit of risk. VistaGen Therapeutics is currently generating about -0.3 per unit of risk. If you would invest  1,334  in Inhibrx on June 24, 2024 and sell it today you would earn a total of  294.00  from holding Inhibrx or generate 22.04% return on investment over 90 days.

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

Inhibrx  vs.  VistaGen Therapeutics

Inhibrx

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Inhibrx are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak fundamental drivers, Inhibrx may actually be approaching a critical reversion point that can send shares even higher in October 2024.

VistaGen Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VistaGen Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, VistaGen Therapeutics is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Inhibrx and VistaGen Therapeutics

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

The idea behind Inhibrx and VistaGen Therapeutics 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.

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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.