Correlation Between Aerovate Therapeutics and Casio Computer

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

By analyzing existing cross correlation between Aerovate Therapeutics and Casio Computer CoLtd, you can compare the effects of market volatilities on Aerovate Therapeutics and Casio Computer 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 Casio Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aerovate Therapeutics and Casio Computer.

Diversification Opportunities for Aerovate Therapeutics and Casio Computer

-0.62

Correlation Coefficient

Aerovate Therapeutics  Casio Computer

Excellent diversification

The 3 months correlation between Aerovate and Casio is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Aerovate Therapeutics and Casio Computer CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Casio Computer CoLtd 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 Casio Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Casio Computer CoLtd has no effect on the direction of Aerovate Therapeutics i.e., Aerovate Therapeutics and Casio Computer go up and down completely randomly.

Pair Corralation between Aerovate Therapeutics and Casio Computer

If you would invest  253.00  in Aerovate Therapeutics on September 19, 2024 and sell it today you would earn a total of  3.00  from holding Aerovate Therapeutics or generate 1.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	4.76%
Values	Daily Returns

Aerovate Therapeutics  vs.  Casio Computer CoLtd

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 fragile basic indicators, Aerovate Therapeutics exhibited solid returns over the last few months and may actually be approaching a breakup point.

Casio Computer CoLtd

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Casio Computer CoLtd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Casio Computer is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Aerovate Therapeutics and Casio Computer

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

The idea behind Aerovate Therapeutics and Casio Computer CoLtd 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.