Correlation Between Aerovate Therapeutics and Apexigen

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

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

Diversification Opportunities for Aerovate Therapeutics and Apexigen

0.11

Correlation Coefficient

Aerovate Therapeutics  Apexigen

Average diversification

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

Pair Corralation between Aerovate Therapeutics and Apexigen

If you would invest  150.00  in Aerovate Therapeutics on September 22, 2024 and sell it today you would earn a total of  103.00  from holding Aerovate Therapeutics or generate 68.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	0.79%
Values	Daily Returns

Aerovate Therapeutics  vs.  Apexigen

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 fragile basic indicators, Aerovate Therapeutics exhibited solid returns over the last few months and may actually be approaching a breakup point.

Apexigen

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Apexigen has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Apexigen is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Aerovate Therapeutics and Apexigen

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

The idea behind Aerovate Therapeutics and Apexigen 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.