Correlation Between Aerovate Therapeutics and Quisitive Technology

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

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

Diversification Opportunities for Aerovate Therapeutics and Quisitive Technology

-0.41

Correlation Coefficient

Aerovate Therapeutics  Quisitive Technology

Very good diversification

The 3 months correlation between Aerovate and Quisitive is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Aerovate Therapeutics and Quisitive Technology Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quisitive Technology 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 Quisitive Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quisitive Technology has no effect on the direction of Aerovate Therapeutics i.e., Aerovate Therapeutics and Quisitive Technology go up and down completely randomly.

Pair Corralation between Aerovate Therapeutics and Quisitive Technology

Given the investment horizon of 90 days Aerovate Therapeutics is expected to generate 1.13 times more return on investment than Quisitive Technology. However, Aerovate Therapeutics is 1.13 times more volatile than Quisitive Technology Solutions. It trades about 0.15 of its potential returns per unit of risk. Quisitive Technology Solutions is currently generating about 0.0 per unit of risk. If you would invest  190.00  in Aerovate Therapeutics on September 13, 2024 and sell it today you would earn a total of  66.00  from holding Aerovate Therapeutics or generate 34.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Aerovate Therapeutics  vs.  Quisitive Technology Solutions

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.

Quisitive Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Quisitive Technology Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Quisitive Technology is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Aerovate Therapeutics and Quisitive Technology

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

The idea behind Aerovate Therapeutics and Quisitive Technology Solutions 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.