Correlation Between Aerovate Therapeutics and Catalyst Biosciences
Can any of the company-specific risk be diversified away by investing in both Aerovate Therapeutics and Catalyst Biosciences 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 Catalyst Biosciences into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aerovate Therapeutics and Catalyst Biosciences, you can compare the effects of market volatilities on Aerovate Therapeutics and Catalyst Biosciences 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 Catalyst Biosciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aerovate Therapeutics and Catalyst Biosciences.
Diversification Opportunities for Aerovate Therapeutics and Catalyst Biosciences
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Aerovate and Catalyst is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Aerovate Therapeutics and Catalyst Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalyst Biosciences 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 Catalyst Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalyst Biosciences has no effect on the direction of Aerovate Therapeutics i.e., Aerovate Therapeutics and Catalyst Biosciences go up and down completely randomly.
Pair Corralation between Aerovate Therapeutics and Catalyst Biosciences
Given the investment horizon of 90 days Aerovate Therapeutics is expected to generate 22.09 times less return on investment than Catalyst Biosciences. In addition to that, Aerovate Therapeutics is 1.04 times more volatile than Catalyst Biosciences. It trades about 0.0 of its total potential returns per unit of risk. Catalyst Biosciences is currently generating about 0.06 per unit of volatility. If you would invest 32.00 in Catalyst Biosciences on August 29, 2024 and sell it today you would earn a total of 9.00 from holding Catalyst Biosciences or generate 28.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 31.52% |
| Values | Daily Returns |
Aerovate Therapeutics vs. Catalyst Biosciences
Performance |
| Timeline |
| Aerovate Therapeutics |
| Catalyst Biosciences |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Aerovate Therapeutics and Catalyst Biosciences Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aerovate Therapeutics and Catalyst Biosciences
The main advantage of trading using opposite Aerovate Therapeutics and Catalyst Biosciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aerovate Therapeutics position performs unexpectedly, Catalyst Biosciences 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 Catalyst Biosciences will offset losses from the drop in Catalyst Biosciences' long position.| Aerovate Therapeutics vs. Eliem Therapeutics | Aerovate Therapeutics vs. Scpharmaceuticals | Aerovate Therapeutics vs. Milestone Pharmaceuticals | Aerovate Therapeutics vs. Seres Therapeutics |
| Catalyst Biosciences vs. Akari Therapeutics PLC | Catalyst Biosciences vs. Benitec Biopharma Ltd | Catalyst Biosciences vs. Pulmatrix |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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