Correlation Between YS Biopharma and Aileron Therapeutics

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

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

Diversification Opportunities for YS Biopharma and Aileron Therapeutics

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Correlation Coefficient

YS Biopharma  Aileron Therapeutics

Pay attention - limited upside

The 3 months correlation between YS Biopharma and Aileron is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding YS Biopharma Co, and Aileron Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aileron Therapeutics and YS Biopharma 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 YS Biopharma Co, are associated (or correlated) with Aileron Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aileron Therapeutics has no effect on the direction of YS Biopharma i.e., YS Biopharma and Aileron Therapeutics go up and down completely randomly.

Pair Corralation between YS Biopharma and Aileron Therapeutics

If you would invest  270.00  in Aileron Therapeutics on September 2, 2024 and sell it today you would earn a total of  16.00  from holding Aileron Therapeutics or generate 5.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

YS Biopharma Co,  vs.  Aileron Therapeutics

YS Biopharma Co,

Risk-Adjusted Performance

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Very Weak

Over the last 90 days YS Biopharma Co, has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, YS Biopharma is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Aileron Therapeutics

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Aileron Therapeutics are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent basic indicators, Aileron Therapeutics displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with YS Biopharma and Aileron Therapeutics

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

The idea behind YS Biopharma Co, and Aileron Therapeutics 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.