Correlation Between Solid Biosciences and INC Research

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

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

Diversification Opportunities for Solid Biosciences and INC Research

0.0

Correlation Coefficient

Solid Biosciences  INC Research

Pay attention - limited upside

The 3 months correlation between Solid and INC is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Solid Biosciences LLC and INC Research Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INC Research Holdings and Solid Biosciences 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 Solid Biosciences LLC are associated (or correlated) with INC Research. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INC Research Holdings has no effect on the direction of Solid Biosciences i.e., Solid Biosciences and INC Research go up and down completely randomly.

Pair Corralation between Solid Biosciences and INC Research

Given the investment horizon of 90 days Solid Biosciences LLC is expected to generate 3.07 times more return on investment than INC Research. However, Solid Biosciences is 3.07 times more volatile than INC Research Holdings. It trades about 0.2 of its potential returns per unit of risk. INC Research Holdings is currently generating about 0.04 per unit of risk. If you would invest  330.00  in Solid Biosciences LLC on April 25, 2025 and sell it today you would earn a total of  346.00  from holding Solid Biosciences LLC or generate 104.85% return on investment over 90 days.

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

Solid Biosciences LLC  vs.  INC Research Holdings

Solid Biosciences LLC

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Solid Biosciences LLC are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental indicators, Solid Biosciences sustained solid returns over the last few months and may actually be approaching a breakup point.

INC Research Holdings

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in INC Research Holdings are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable fundamental indicators, INC Research is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Solid Biosciences and INC Research

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

The idea behind Solid Biosciences LLC and INC Research Holdings 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.