Correlation Between Aerovate Therapeutics and STANLN

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Can any of the company-specific risk be diversified away by investing in both Aerovate Therapeutics and STANLN 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 STANLN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aerovate Therapeutics and STANLN 32 17 APR 25, you can compare the effects of market volatilities on Aerovate Therapeutics and STANLN 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 STANLN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aerovate Therapeutics and STANLN.

Diversification Opportunities for Aerovate Therapeutics and STANLN

-0.56
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Aerovate and STANLN is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Aerovate Therapeutics and STANLN 32 17 APR 25 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STANLN 32 17 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 STANLN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STANLN 32 17 has no effect on the direction of Aerovate Therapeutics i.e., Aerovate Therapeutics and STANLN go up and down completely randomly.

Pair Corralation between Aerovate Therapeutics and STANLN

Given the investment horizon of 90 days Aerovate Therapeutics is expected to generate 10.68 times more return on investment than STANLN. However, Aerovate Therapeutics is 10.68 times more volatile than STANLN 32 17 APR 25. It trades about 0.0 of its potential returns per unit of risk. STANLN 32 17 APR 25 is currently generating about -0.03 per unit of risk. If you would invest  2,198  in Aerovate Therapeutics on December 4, 2024 and sell it today you would lose (1,958) from holding Aerovate Therapeutics or give up 89.08% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy18.05%
ValuesDaily Returns

Aerovate Therapeutics  vs.  STANLN 32 17 APR 25

 Performance 
       Timeline  
Aerovate Therapeutics 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Aerovate Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Aerovate Therapeutics is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.
STANLN 32 17 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days STANLN 32 17 APR 25 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for STANLN 32 17 APR 25 investors.

Aerovate Therapeutics and STANLN Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Aerovate Therapeutics and STANLN

The main advantage of trading using opposite Aerovate Therapeutics and STANLN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aerovate Therapeutics position performs unexpectedly, STANLN 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 STANLN will offset losses from the drop in STANLN's long position.
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The idea behind Aerovate Therapeutics and STANLN 32 17 APR 25 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.

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