Correlation Between Aerovate Therapeutics and Icad

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

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

Diversification Opportunities for Aerovate Therapeutics and Icad

0.49

Correlation Coefficient

Aerovate Therapeutics  Icad

Very weak diversification

The 3 months correlation between Aerovate and Icad is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Aerovate Therapeutics and icad inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on icad inc 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 Icad. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of icad inc has no effect on the direction of Aerovate Therapeutics i.e., Aerovate Therapeutics and Icad go up and down completely randomly.

Pair Corralation between Aerovate Therapeutics and Icad

Given the investment horizon of 90 days Aerovate Therapeutics is expected to generate 0.63 times more return on investment than Icad. However, Aerovate Therapeutics is 1.6 times less risky than Icad. It trades about 0.07 of its potential returns per unit of risk. icad inc is currently generating about 0.03 per unit of risk. If you would invest  232.00  in Aerovate Therapeutics on September 17, 2024 and sell it today you would earn a total of  21.00  from holding Aerovate Therapeutics or generate 9.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Aerovate Therapeutics  vs.  icad inc

Aerovate Therapeutics

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aerovate Therapeutics are ranked lower than 10 (%) 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.

icad inc

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in icad inc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, Icad exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aerovate Therapeutics and Icad

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

The idea behind Aerovate Therapeutics and icad inc 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.