Correlation Between Aerovate Therapeutics and Belite Bio
Can any of the company-specific risk be diversified away by investing in both Aerovate Therapeutics and Belite Bio 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 Belite Bio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aerovate Therapeutics and Belite Bio ADR, you can compare the effects of market volatilities on Aerovate Therapeutics and Belite Bio 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 Belite Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aerovate Therapeutics and Belite Bio.
Diversification Opportunities for Aerovate Therapeutics and Belite Bio
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Aerovate and Belite is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Aerovate Therapeutics and Belite Bio ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Belite Bio ADR 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 Belite Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Belite Bio ADR has no effect on the direction of Aerovate Therapeutics i.e., Aerovate Therapeutics and Belite Bio go up and down completely randomly.
Pair Corralation between Aerovate Therapeutics and Belite Bio
Given the investment horizon of 90 days Aerovate Therapeutics is expected to generate 0.64 times more return on investment than Belite Bio. However, Aerovate Therapeutics is 1.55 times less risky than Belite Bio. It trades about 0.11 of its potential returns per unit of risk. Belite Bio ADR is currently generating about -0.02 per unit of risk. If you would invest 245.00 in Aerovate Therapeutics on September 1, 2024 and sell it today you would earn a total of 18.00 from holding Aerovate Therapeutics or generate 7.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aerovate Therapeutics vs. Belite Bio ADR
Performance |
| Timeline |
| Aerovate Therapeutics |
| Belite Bio ADR |
Aerovate Therapeutics and Belite Bio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aerovate Therapeutics and Belite Bio
The main advantage of trading using opposite Aerovate Therapeutics and Belite Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aerovate Therapeutics position performs unexpectedly, Belite Bio 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 Belite Bio will offset losses from the drop in Belite Bio's long position.| Aerovate Therapeutics vs. Tff Pharmaceuticals | Aerovate Therapeutics vs. Eliem Therapeutics | Aerovate Therapeutics vs. Inhibrx | Aerovate Therapeutics vs. Enliven Therapeutics |
| Belite Bio vs. Anebulo Pharmaceuticals | Belite Bio vs. Mineralys Therapeutics, Common | Belite Bio vs. AN2 Therapeutics | Belite Bio vs. Aerovate Therapeutics |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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