Correlation Between Aerovate Therapeutics and BigBearai Holdings
Can any of the company-specific risk be diversified away by investing in both Aerovate Therapeutics and BigBearai Holdings 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 BigBearai Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aerovate Therapeutics and BigBearai Holdings, you can compare the effects of market volatilities on Aerovate Therapeutics and BigBearai Holdings 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 BigBearai Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aerovate Therapeutics and BigBearai Holdings.
Diversification Opportunities for Aerovate Therapeutics and BigBearai Holdings
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aerovate and BigBearai is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Aerovate Therapeutics and BigBearai Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BigBearai Holdings 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 BigBearai Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BigBearai Holdings has no effect on the direction of Aerovate Therapeutics i.e., Aerovate Therapeutics and BigBearai Holdings go up and down completely randomly.
Pair Corralation between Aerovate Therapeutics and BigBearai Holdings
Given the investment horizon of 90 days Aerovate Therapeutics is expected to under-perform the BigBearai Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Aerovate Therapeutics is 5.0 times less risky than BigBearai Holdings. The stock trades about -0.08 of its potential returns per unit of risk. The BigBearai Holdings is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 182.00 in BigBearai Holdings on September 13, 2024 and sell it today you would earn a total of 116.00 from holding BigBearai Holdings or generate 63.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Aerovate Therapeutics vs. BigBearai Holdings
Performance |
| Timeline |
| Aerovate Therapeutics |
| BigBearai Holdings |
Aerovate Therapeutics and BigBearai Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aerovate Therapeutics and BigBearai Holdings
The main advantage of trading using opposite Aerovate Therapeutics and BigBearai Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aerovate Therapeutics position performs unexpectedly, BigBearai Holdings 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 BigBearai Holdings will offset losses from the drop in BigBearai Holdings' long position.| Aerovate Therapeutics vs. Adagene | Aerovate Therapeutics vs. Acrivon Therapeutics, Common | Aerovate Therapeutics vs. Rezolute | Aerovate Therapeutics vs. AN2 Therapeutics |
| BigBearai Holdings vs. Innodata | BigBearai Holdings vs. CLPS Inc | BigBearai Holdings vs. ARB IOT Group | BigBearai Holdings vs. FiscalNote Holdings |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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