Correlation Between Aerovate Therapeutics and BRFSBZ

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

By analyzing existing cross correlation between Aerovate Therapeutics and BRFSBZ 575 21 SEP 50, you can compare the effects of market volatilities on Aerovate Therapeutics and BRFSBZ 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 BRFSBZ. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aerovate Therapeutics and BRFSBZ.

Diversification Opportunities for Aerovate Therapeutics and BRFSBZ

0.75

Correlation Coefficient

Aerovate Therapeutics  BRFSBZ

Poor diversification

The 3 months correlation between Aerovate and BRFSBZ is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Aerovate Therapeutics and BRFSBZ 575 21 SEP 50 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BRFSBZ 575 21 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 BRFSBZ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BRFSBZ 575 21 has no effect on the direction of Aerovate Therapeutics i.e., Aerovate Therapeutics and BRFSBZ go up and down completely randomly.

Pair Corralation between Aerovate Therapeutics and BRFSBZ

Given the investment horizon of 90 days Aerovate Therapeutics is expected to generate 1.7 times more return on investment than BRFSBZ. However, Aerovate Therapeutics is 1.7 times more volatile than BRFSBZ 575 21 SEP 50. It trades about 0.15 of its potential returns per unit of risk. BRFSBZ 575 21 SEP 50 is currently generating about -0.33 per unit of risk. If you would invest  191.00  in Aerovate Therapeutics on September 14, 2024 and sell it today you would earn a total of  69.00  from holding Aerovate Therapeutics or generate 36.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	17.46%
Values	Daily Returns

Aerovate Therapeutics  vs.  BRFSBZ 575 21 SEP 50

Aerovate Therapeutics

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Aerovate Therapeutics are ranked lower than 12 (%) 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.

BRFSBZ 575 21

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BRFSBZ 575 21 SEP 50 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for BRFSBZ 575 21 SEP 50 investors.

Pair Trading with Aerovate Therapeutics and BRFSBZ

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

The idea behind Aerovate Therapeutics and BRFSBZ 575 21 SEP 50 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..