Correlation Between Aerovate Therapeutics and MBGGR

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

By analyzing existing cross correlation between Aerovate Therapeutics and MBGGR 35 03 AUG 25, you can compare the effects of market volatilities on Aerovate Therapeutics and MBGGR 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 MBGGR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aerovate Therapeutics and MBGGR.

Diversification Opportunities for Aerovate Therapeutics and MBGGR

0.69

Correlation Coefficient

Aerovate Therapeutics  MBGGR

Poor diversification

The 3 months correlation between Aerovate and MBGGR is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Aerovate Therapeutics and MBGGR 35 03 AUG 25 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MBGGR 35 03 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 MBGGR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MBGGR 35 03 has no effect on the direction of Aerovate Therapeutics i.e., Aerovate Therapeutics and MBGGR go up and down completely randomly.

Pair Corralation between Aerovate Therapeutics and MBGGR

Given the investment horizon of 90 days Aerovate Therapeutics is expected to generate 6.27 times more return on investment than MBGGR. However, Aerovate Therapeutics is 6.27 times more volatile than MBGGR 35 03 AUG 25. It trades about 0.13 of its potential returns per unit of risk. MBGGR 35 03 AUG 25 is currently generating about -0.21 per unit of risk. If you would invest  207.00  in Aerovate Therapeutics on October 1, 2024 and sell it today you would earn a total of  60.00  from holding Aerovate Therapeutics or generate 28.99% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	33.33%
Values	Daily Returns

Aerovate Therapeutics  vs.  MBGGR 35 03 AUG 25

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

MBGGR 35 03

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MBGGR 35 03 AUG 25 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest abnormal performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for MBGGR 35 03 AUG 25 investors.

Pair Trading with Aerovate Therapeutics and MBGGR

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

The idea behind Aerovate Therapeutics and MBGGR 35 03 AUG 25 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.