Correlation Between Aerovate Therapeutics and Atreca

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

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

Diversification Opportunities for Aerovate Therapeutics and Atreca

0.21

Correlation Coefficient

Aerovate Therapeutics  Atreca

Modest diversification

The 3 months correlation between Aerovate and Atreca is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Aerovate Therapeutics and Atreca Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atreca Inc and Aerovate 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 Aerovate Therapeutics are associated (or correlated) with Atreca. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atreca Inc has no effect on the direction of Aerovate Therapeutics i.e., Aerovate Therapeutics and Atreca go up and down completely randomly.

Pair Corralation between Aerovate Therapeutics and Atreca

If you would invest  191.00  in Aerovate Therapeutics on September 17, 2024 and sell it today you would earn a total of  62.00  from holding Aerovate Therapeutics or generate 32.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	1.56%
Values	Daily Returns

Aerovate Therapeutics  vs.  Atreca Inc

Aerovate Therapeutics

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aerovate Therapeutics are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent basic indicators, Aerovate Therapeutics exhibited solid returns over the last few months and may actually be approaching a breakup point.

Atreca Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Atreca Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent technical and fundamental indicators, Atreca is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Aerovate Therapeutics and Atreca

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

The idea behind Aerovate Therapeutics and Atreca Inc 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.