Correlation Between Icad and Aerovate Therapeutics
Can any of the company-specific risk be diversified away by investing in both Icad and Aerovate Therapeutics 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 Icad and Aerovate Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between icad inc and Aerovate Therapeutics, you can compare the effects of market volatilities on Icad and Aerovate Therapeutics 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 Icad with a short position of Aerovate Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icad and Aerovate Therapeutics.
Diversification Opportunities for Icad and Aerovate Therapeutics
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Icad and Aerovate is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding icad inc and Aerovate Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aerovate Therapeutics and Icad 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 icad inc are associated (or correlated) with Aerovate Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aerovate Therapeutics has no effect on the direction of Icad i.e., Icad and Aerovate Therapeutics go up and down completely randomly.
Pair Corralation between Icad and Aerovate Therapeutics
Given the investment horizon of 90 days icad inc is expected to generate 1.02 times more return on investment than Aerovate Therapeutics. However, Icad is 1.02 times more volatile than Aerovate Therapeutics. It trades about 0.03 of its potential returns per unit of risk. Aerovate Therapeutics is currently generating about -0.01 per unit of risk. If you would invest 163.00 in icad inc on September 16, 2024 and sell it today you would earn a total of 32.00 from holding icad inc or generate 19.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
icad inc vs. Aerovate Therapeutics
Performance |
| Timeline |
| icad inc |
| Aerovate Therapeutics |
Icad and Aerovate Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icad and Aerovate Therapeutics
The main advantage of trading using opposite Icad and Aerovate Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icad position performs unexpectedly, Aerovate Therapeutics 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 Aerovate Therapeutics will offset losses from the drop in Aerovate Therapeutics' long position.The idea behind icad inc and Aerovate Therapeutics 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.| Aerovate Therapeutics vs. Puma Biotechnology | Aerovate Therapeutics vs. Iovance Biotherapeutics | Aerovate Therapeutics vs. Zentalis Pharmaceuticals Llc | Aerovate Therapeutics vs. Syndax Pharmaceuticals |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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