Correlation Between Aerovate Therapeutics and Blueprint Medicines
Can any of the company-specific risk be diversified away by investing in both Aerovate Therapeutics and Blueprint Medicines 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 Blueprint Medicines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aerovate Therapeutics and Blueprint Medicines Corp, you can compare the effects of market volatilities on Aerovate Therapeutics and Blueprint Medicines 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 Blueprint Medicines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aerovate Therapeutics and Blueprint Medicines.
Diversification Opportunities for Aerovate Therapeutics and Blueprint Medicines
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aerovate and Blueprint is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Aerovate Therapeutics and Blueprint Medicines Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blueprint Medicines Corp 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 Blueprint Medicines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blueprint Medicines Corp has no effect on the direction of Aerovate Therapeutics i.e., Aerovate Therapeutics and Blueprint Medicines go up and down completely randomly.
Pair Corralation between Aerovate Therapeutics and Blueprint Medicines
Given the investment horizon of 90 days Aerovate Therapeutics is expected to generate 1.64 times more return on investment than Blueprint Medicines. However, Aerovate Therapeutics is 1.64 times more volatile than Blueprint Medicines Corp. It trades about 0.18 of its potential returns per unit of risk. Blueprint Medicines Corp is currently generating about 0.1 per unit of risk. If you would invest 199.00 in Aerovate Therapeutics on September 3, 2024 and sell it today you would earn a total of 64.00 from holding Aerovate Therapeutics or generate 32.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aerovate Therapeutics vs. Blueprint Medicines Corp
Performance |
| Timeline |
| Aerovate Therapeutics |
| Blueprint Medicines Corp |
Aerovate Therapeutics and Blueprint Medicines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aerovate Therapeutics and Blueprint Medicines
The main advantage of trading using opposite Aerovate Therapeutics and Blueprint Medicines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aerovate Therapeutics position performs unexpectedly, Blueprint Medicines 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 Blueprint Medicines will offset losses from the drop in Blueprint Medicines' long position.| Aerovate Therapeutics vs. DiaMedica Therapeutics | Aerovate Therapeutics vs. Lyra Therapeutics | Aerovate Therapeutics vs. Centessa Pharmaceuticals PLC |
| Blueprint Medicines vs. Terns Pharmaceuticals | Blueprint Medicines vs. Amylyx Pharmaceuticals | Blueprint Medicines vs. Acumen Pharmaceuticals | Blueprint Medicines vs. Inozyme Pharma |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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