Correlation Between Lantern Pharma and Aerovate Therapeutics
Can any of the company-specific risk be diversified away by investing in both Lantern Pharma 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 Lantern Pharma and Aerovate Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lantern Pharma and Aerovate Therapeutics, you can compare the effects of market volatilities on Lantern Pharma 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 Lantern Pharma with a short position of Aerovate Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lantern Pharma and Aerovate Therapeutics.
Diversification Opportunities for Lantern Pharma and Aerovate Therapeutics
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lantern and Aerovate is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Lantern Pharma and Aerovate Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aerovate Therapeutics and Lantern Pharma 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 Lantern Pharma 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 Lantern Pharma i.e., Lantern Pharma and Aerovate Therapeutics go up and down completely randomly.
Pair Corralation between Lantern Pharma and Aerovate Therapeutics
Given the investment horizon of 90 days Lantern Pharma is expected to under-perform the Aerovate Therapeutics. In addition to that, Lantern Pharma is 1.04 times more volatile than Aerovate Therapeutics. It trades about -0.04 of its total potential returns per unit of risk. Aerovate Therapeutics is currently generating about 0.18 per unit of volatility. If you would invest 199.00 in Aerovate Therapeutics on September 3, 2024 and sell it today you would earn a total of 64.00 from holding Aerovate Therapeutics or generate 32.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lantern Pharma vs. Aerovate Therapeutics
Performance |
| Timeline |
| Lantern Pharma |
| Aerovate Therapeutics |
Lantern Pharma and Aerovate Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lantern Pharma and Aerovate Therapeutics
The main advantage of trading using opposite Lantern Pharma and Aerovate Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lantern Pharma 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.| Lantern Pharma vs. Tff Pharmaceuticals | Lantern Pharma vs. Generation Bio Co | Lantern Pharma vs. Lyra Therapeutics | Lantern Pharma vs. Immunome |
| Aerovate Therapeutics vs. DiaMedica Therapeutics | Aerovate Therapeutics vs. Lyra Therapeutics | Aerovate Therapeutics vs. Centessa Pharmaceuticals PLC |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |