Correlation Between Aerovate Therapeutics and Bonus BioGroup
Can any of the company-specific risk be diversified away by investing in both Aerovate Therapeutics and Bonus BioGroup 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 Bonus BioGroup into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aerovate Therapeutics and Bonus BioGroup, you can compare the effects of market volatilities on Aerovate Therapeutics and Bonus BioGroup 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 Bonus BioGroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aerovate Therapeutics and Bonus BioGroup.
Diversification Opportunities for Aerovate Therapeutics and Bonus BioGroup
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Aerovate and Bonus is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Aerovate Therapeutics and Bonus BioGroup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bonus BioGroup 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 Bonus BioGroup. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bonus BioGroup has no effect on the direction of Aerovate Therapeutics i.e., Aerovate Therapeutics and Bonus BioGroup go up and down completely randomly.
Pair Corralation between Aerovate Therapeutics and Bonus BioGroup
Given the investment horizon of 90 days Aerovate Therapeutics is expected to under-perform the Bonus BioGroup. But the stock apears to be less risky and, when comparing its historical volatility, Aerovate Therapeutics is 8.82 times less risky than Bonus BioGroup. The stock trades about -0.02 of its potential returns per unit of risk. The Bonus BioGroup is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 3.00 in Bonus BioGroup on December 2, 2024 and sell it today you would earn a total of 2.00 from holding Bonus BioGroup or generate 66.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.41% |
| Values | Daily Returns |
Aerovate Therapeutics vs. Bonus BioGroup
Performance |
| Timeline |
| Aerovate Therapeutics |
| Bonus BioGroup |
Aerovate Therapeutics and Bonus BioGroup Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aerovate Therapeutics and Bonus BioGroup
The main advantage of trading using opposite Aerovate Therapeutics and Bonus BioGroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aerovate Therapeutics position performs unexpectedly, Bonus BioGroup 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 Bonus BioGroup will offset losses from the drop in Bonus BioGroup's long position.| Aerovate Therapeutics vs. Adagene | Aerovate Therapeutics vs. Acrivon Therapeutics, Common | Aerovate Therapeutics vs. Rezolute | Aerovate Therapeutics vs. AN2 Therapeutics |
| Bonus BioGroup vs. Biotron Limited | Bonus BioGroup vs. biOasis Technologies | Bonus BioGroup vs. Covalon Technologies | Bonus BioGroup vs. Mosaic Immunoengineering |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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