Correlation Between Aerovate Therapeutics and KROGER

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

By analyzing existing cross correlation between Aerovate Therapeutics and KROGER 8 percent, you can compare the effects of market volatilities on Aerovate Therapeutics and KROGER 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 KROGER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aerovate Therapeutics and KROGER.

Diversification Opportunities for Aerovate Therapeutics and KROGER

-0.32

Correlation Coefficient

Aerovate Therapeutics  KROGER

Very good diversification

The 3 months correlation between Aerovate and KROGER is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Aerovate Therapeutics and KROGER 8 percent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KROGER 8 percent 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 KROGER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KROGER 8 percent has no effect on the direction of Aerovate Therapeutics i.e., Aerovate Therapeutics and KROGER go up and down completely randomly.

Pair Corralation between Aerovate Therapeutics and KROGER

Given the investment horizon of 90 days Aerovate Therapeutics is expected to under-perform the KROGER. In addition to that, Aerovate Therapeutics is 2.71 times more volatile than KROGER 8 percent. It trades about -0.07 of its total potential returns per unit of risk. KROGER 8 percent is currently generating about 0.07 per unit of volatility. If you would invest  11,369  in KROGER 8 percent on December 2, 2024 and sell it today you would earn a total of  286.00  from holding KROGER 8 percent or generate 2.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	88.52%
Values	Daily Returns

Aerovate Therapeutics  vs.  KROGER 8 percent

Aerovate Therapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aerovate Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

KROGER 8 percent

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in KROGER 8 percent are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, KROGER is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Aerovate Therapeutics and KROGER

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

The idea behind Aerovate Therapeutics and KROGER 8 percent 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.