Correlation Between Aerovate Therapeutics and Carbios SAS
Can any of the company-specific risk be diversified away by investing in both Aerovate Therapeutics and Carbios SAS 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 Carbios SAS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aerovate Therapeutics and Carbios SAS, you can compare the effects of market volatilities on Aerovate Therapeutics and Carbios SAS 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 Carbios SAS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aerovate Therapeutics and Carbios SAS.
Diversification Opportunities for Aerovate Therapeutics and Carbios SAS
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Aerovate and Carbios is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Aerovate Therapeutics and Carbios SAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carbios SAS 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 Carbios SAS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carbios SAS has no effect on the direction of Aerovate Therapeutics i.e., Aerovate Therapeutics and Carbios SAS go up and down completely randomly.
Pair Corralation between Aerovate Therapeutics and Carbios SAS
Given the investment horizon of 90 days Aerovate Therapeutics is expected to under-perform the Carbios SAS. But the stock apears to be less risky and, when comparing its historical volatility, Aerovate Therapeutics is 3.62 times less risky than Carbios SAS. The stock trades about -0.02 of its potential returns per unit of risk. The Carbios SAS is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 837.00 in Carbios SAS on September 15, 2024 and sell it today you would earn a total of 94.00 from holding Carbios SAS or generate 11.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aerovate Therapeutics vs. Carbios SAS
Performance |
| Timeline |
| Aerovate Therapeutics |
| Carbios SAS |
Aerovate Therapeutics and Carbios SAS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aerovate Therapeutics and Carbios SAS
The main advantage of trading using opposite Aerovate Therapeutics and Carbios SAS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aerovate Therapeutics position performs unexpectedly, Carbios SAS 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 Carbios SAS will offset losses from the drop in Carbios SAS's long position.| Aerovate Therapeutics vs. Puma Biotechnology | Aerovate Therapeutics vs. Iovance Biotherapeutics | Aerovate Therapeutics vs. Day One Biopharmaceuticals | Aerovate Therapeutics vs. Inozyme Pharma |
| Carbios SAS vs. Chemours Co | Carbios SAS vs. International Flavors Fragrances | Carbios SAS vs. Air Products and | Carbios SAS vs. PPG Industries |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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