Correlation Between SalMar ASA and Aerovate Therapeutics
Can any of the company-specific risk be diversified away by investing in both SalMar ASA 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 SalMar ASA and Aerovate Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SalMar ASA and Aerovate Therapeutics, you can compare the effects of market volatilities on SalMar ASA 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 SalMar ASA with a short position of Aerovate Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of SalMar ASA and Aerovate Therapeutics.
Diversification Opportunities for SalMar ASA and Aerovate Therapeutics
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between SalMar and Aerovate is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding SalMar ASA and Aerovate Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aerovate Therapeutics and SalMar ASA 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 SalMar ASA 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 SalMar ASA i.e., SalMar ASA and Aerovate Therapeutics go up and down completely randomly.
Pair Corralation between SalMar ASA and Aerovate Therapeutics
Assuming the 90 days horizon SalMar ASA is expected to generate 1.87 times more return on investment than Aerovate Therapeutics. However, SalMar ASA is 1.87 times more volatile than Aerovate Therapeutics. It trades about 0.0 of its potential returns per unit of risk. Aerovate Therapeutics is currently generating about -0.24 per unit of risk. If you would invest 1,204 in SalMar ASA on December 4, 2024 and sell it today you would lose (9.00) from holding SalMar ASA or give up 0.75% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
SalMar ASA vs. Aerovate Therapeutics
Performance |
Timeline |
SalMar ASA |
Aerovate Therapeutics |
SalMar ASA and Aerovate Therapeutics Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SalMar ASA and Aerovate Therapeutics
The main advantage of trading using opposite SalMar ASA and Aerovate Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SalMar ASA 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.SalMar ASA vs. SLC Agricola SA | SalMar ASA vs. Cal Maine Foods | SalMar ASA vs. Bunge Limited | SalMar ASA vs. Austevoll Seafood ASA |
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Check out your portfolio center.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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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