Correlation Between Aileron Therapeutics and Marizyme

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

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

Diversification Opportunities for Aileron Therapeutics and Marizyme

0.11

Correlation Coefficient

Aileron Therapeutics  Marizyme

Average diversification

The 3 months correlation between Aileron and Marizyme is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Aileron Therapeutics and Marizyme in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marizyme and Aileron 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 Aileron Therapeutics are associated (or correlated) with Marizyme. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marizyme has no effect on the direction of Aileron Therapeutics i.e., Aileron Therapeutics and Marizyme go up and down completely randomly.

Pair Corralation between Aileron Therapeutics and Marizyme

Given the investment horizon of 90 days Aileron Therapeutics is expected to under-perform the Marizyme. But the stock apears to be less risky and, when comparing its historical volatility, Aileron Therapeutics is 3.23 times less risky than Marizyme. The stock trades about -0.04 of its potential returns per unit of risk. The Marizyme is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  4.00  in Marizyme on September 12, 2024 and sell it today you would earn a total of  0.00  from holding Marizyme or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Aileron Therapeutics  vs.  Marizyme

Aileron Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aileron Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Marizyme

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Marizyme are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent basic indicators, Marizyme displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aileron Therapeutics and Marizyme

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

The idea behind Aileron Therapeutics and Marizyme 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 Global Correlations module to find global opportunities by holding instruments from different markets.