Correlation Between Aerovate Therapeutics and QBE Insurance
Can any of the company-specific risk be diversified away by investing in both Aerovate Therapeutics and QBE Insurance 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 QBE Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aerovate Therapeutics and QBE Insurance Group, you can compare the effects of market volatilities on Aerovate Therapeutics and QBE Insurance 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 QBE Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aerovate Therapeutics and QBE Insurance.
Diversification Opportunities for Aerovate Therapeutics and QBE Insurance
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aerovate and QBE is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Aerovate Therapeutics and QBE Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QBE Insurance Group 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 QBE Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QBE Insurance Group has no effect on the direction of Aerovate Therapeutics i.e., Aerovate Therapeutics and QBE Insurance go up and down completely randomly.
Pair Corralation between Aerovate Therapeutics and QBE Insurance
Given the investment horizon of 90 days Aerovate Therapeutics is expected to generate 1.64 times more return on investment than QBE Insurance. However, Aerovate Therapeutics is 1.64 times more volatile than QBE Insurance Group. It trades about 0.11 of its potential returns per unit of risk. QBE Insurance Group is currently generating about 0.02 per unit of risk. If you would invest 165.00 in Aerovate Therapeutics on September 13, 2024 and sell it today you would earn a total of 91.00 from holding Aerovate Therapeutics or generate 55.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.2% |
| Values | Daily Returns |
Aerovate Therapeutics vs. QBE Insurance Group
Performance |
| Timeline |
| Aerovate Therapeutics |
| QBE Insurance Group |
Aerovate Therapeutics and QBE Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aerovate Therapeutics and QBE Insurance
The main advantage of trading using opposite Aerovate Therapeutics and QBE Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aerovate Therapeutics position performs unexpectedly, QBE Insurance 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 QBE Insurance will offset losses from the drop in QBE Insurance's long position.| Aerovate Therapeutics vs. Adagene | Aerovate Therapeutics vs. Acrivon Therapeutics, Common | Aerovate Therapeutics vs. Rezolute | Aerovate Therapeutics vs. AN2 Therapeutics |
| QBE Insurance vs. Root Inc | QBE Insurance vs. Bank of America | QBE Insurance vs. Aerovate Therapeutics | QBE Insurance vs. SoundHound AI |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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