Correlation Between Aerovate Therapeutics and MQGAU

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

By analyzing existing cross correlation between Aerovate Therapeutics and MQGAU 5376057 23 SEP 27, you can compare the effects of market volatilities on Aerovate Therapeutics and MQGAU 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 MQGAU. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aerovate Therapeutics and MQGAU.

Diversification Opportunities for Aerovate Therapeutics and MQGAU

0.67

Correlation Coefficient

Aerovate Therapeutics  MQGAU

Poor diversification

The 3 months correlation between Aerovate and MQGAU is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Aerovate Therapeutics and MQGAU 5376057 23 SEP 27 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MQGAU 5376057 23 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 MQGAU. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MQGAU 5376057 23 has no effect on the direction of Aerovate Therapeutics i.e., Aerovate Therapeutics and MQGAU go up and down completely randomly.

Pair Corralation between Aerovate Therapeutics and MQGAU

Given the investment horizon of 90 days Aerovate Therapeutics is expected to generate 39.46 times more return on investment than MQGAU. However, Aerovate Therapeutics is 39.46 times more volatile than MQGAU 5376057 23 SEP 27. It trades about 0.15 of its potential returns per unit of risk. MQGAU 5376057 23 SEP 27 is currently generating about 0.1 per unit of risk. If you would invest  191.00  in Aerovate Therapeutics on September 18, 2024 and sell it today you would earn a total of  65.00  from holding Aerovate Therapeutics or generate 34.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	33.33%
Values	Daily Returns

Aerovate Therapeutics  vs.  MQGAU 5376057 23 SEP 27

Aerovate Therapeutics

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Aerovate Therapeutics are ranked lower than 11 (%) 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.

MQGAU 5376057 23

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in MQGAU 5376057 23 SEP 27 are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, MQGAU is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Aerovate Therapeutics and MQGAU

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

The idea behind Aerovate Therapeutics and MQGAU 5376057 23 SEP 27 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.

Check out your portfolio center.

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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.