Correlation Between Aerovate Therapeutics and Match

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

By analyzing existing cross correlation between Aerovate Therapeutics and Match Group 4125, you can compare the effects of market volatilities on Aerovate Therapeutics and Match 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 Match. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aerovate Therapeutics and Match.

Diversification Opportunities for Aerovate Therapeutics and Match

-0.69

Correlation Coefficient

Aerovate Therapeutics  Match

Excellent diversification

The 3 months correlation between Aerovate and Match is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Aerovate Therapeutics and Match Group 4125 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Match Group 4125 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 Match. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Match Group 4125 has no effect on the direction of Aerovate Therapeutics i.e., Aerovate Therapeutics and Match go up and down completely randomly.

Pair Corralation between Aerovate Therapeutics and Match

Given the investment horizon of 90 days Aerovate Therapeutics is expected to under-perform the Match. But the stock apears to be less risky and, when comparing its historical volatility, Aerovate Therapeutics is 11.1 times less risky than Match. The stock trades about 0.0 of its potential returns per unit of risk. The Match Group 4125 is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  8,132  in Match Group 4125 on September 18, 2024 and sell it today you would lose (18.00) from holding Match Group 4125 or give up 0.22% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	88.89%
Values	Daily Returns

Aerovate Therapeutics  vs.  Match Group 4125

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.

Match Group 4125

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Match Group 4125 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent 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 Match Group 4125 investors.

Pair Trading with Aerovate Therapeutics and Match

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

The idea behind Aerovate Therapeutics and Match Group 4125 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.