Correlation Between Celldex Therapeutics and Aerovate Therapeutics

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

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

Diversification Opportunities for Celldex Therapeutics and Aerovate Therapeutics

-0.76

Correlation Coefficient

Celldex Therapeutics  Aerovate Therapeutics

Pay attention - limited upside

The 3 months correlation between Celldex and Aerovate is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Celldex Therapeutics and Aerovate Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aerovate Therapeutics and Celldex 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 Celldex Therapeutics are associated (or correlated) with Aerovate Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aerovate Therapeutics has no effect on the direction of Celldex Therapeutics i.e., Celldex Therapeutics and Aerovate Therapeutics go up and down completely randomly.

Pair Corralation between Celldex Therapeutics and Aerovate Therapeutics

Given the investment horizon of 90 days Celldex Therapeutics is expected to under-perform the Aerovate Therapeutics. In addition to that, Celldex Therapeutics is 1.04 times more volatile than Aerovate Therapeutics. It trades about -0.18 of its total potential returns per unit of risk. Aerovate Therapeutics is currently generating about 0.14 per unit of volatility. If you would invest  189.00  in Aerovate Therapeutics on September 23, 2024 and sell it today you would earn a total of  64.00  from holding Aerovate Therapeutics or generate 33.86% return on investment over 90 days.

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

Celldex Therapeutics  vs.  Aerovate Therapeutics

Celldex Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Celldex Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

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

Pair Trading with Celldex Therapeutics and Aerovate Therapeutics

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

The idea behind Celldex Therapeutics and Aerovate Therapeutics 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 Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..