Correlation Between Akero Therapeutics and Airsculpt Technologies

Can any of the company-specific risk be diversified away by investing in both Akero Therapeutics and Airsculpt Technologies 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 Akero Therapeutics and Airsculpt Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Akero Therapeutics and Airsculpt Technologies, you can compare the effects of market volatilities on Akero Therapeutics and Airsculpt Technologies 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 Akero Therapeutics with a short position of Airsculpt Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Akero Therapeutics and Airsculpt Technologies.

Diversification Opportunities for Akero Therapeutics and Airsculpt Technologies

0.58

Correlation Coefficient

Akero Therapeutics  Airsculpt Technologies

Very weak diversification

The 3 months correlation between Akero and Airsculpt is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Akero Therapeutics and Airsculpt Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airsculpt Technologies and Akero 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 Akero Therapeutics are associated (or correlated) with Airsculpt Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Airsculpt Technologies has no effect on the direction of Akero Therapeutics i.e., Akero Therapeutics and Airsculpt Technologies go up and down completely randomly.

Pair Corralation between Akero Therapeutics and Airsculpt Technologies

Given the investment horizon of 90 days Akero Therapeutics is expected to generate 4.86 times less return on investment than Airsculpt Technologies. But when comparing it to its historical volatility, Akero Therapeutics is 1.25 times less risky than Airsculpt Technologies. It trades about 0.08 of its potential returns per unit of risk. Airsculpt Technologies is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest  256.00  in Airsculpt Technologies on May 7, 2025 and sell it today you would earn a total of  347.00  from holding Airsculpt Technologies or generate 135.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Akero Therapeutics  vs.  Airsculpt Technologies

Akero Therapeutics

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Akero Therapeutics are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Akero Therapeutics displayed solid returns over the last few months and may actually be approaching a breakup point.

Airsculpt Technologies

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Airsculpt Technologies are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, Airsculpt Technologies unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Akero Therapeutics and Airsculpt Technologies

The main advantage of trading using opposite Akero Therapeutics and Airsculpt Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Akero Therapeutics position performs unexpectedly, Airsculpt Technologies 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 Airsculpt Technologies will offset losses from the drop in Airsculpt Technologies' long position.

The idea behind Akero Therapeutics and Airsculpt Technologies 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.