Correlation Between Aquestive Therapeutics and Aurora Cannabis
Can any of the company-specific risk be diversified away by investing in both Aquestive Therapeutics and Aurora Cannabis 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 Aquestive Therapeutics and Aurora Cannabis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aquestive Therapeutics and Aurora Cannabis, you can compare the effects of market volatilities on Aquestive Therapeutics and Aurora Cannabis 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 Aquestive Therapeutics with a short position of Aurora Cannabis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aquestive Therapeutics and Aurora Cannabis.
Diversification Opportunities for Aquestive Therapeutics and Aurora Cannabis
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aquestive and Aurora is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Aquestive Therapeutics and Aurora Cannabis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurora Cannabis and Aquestive 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 Aquestive Therapeutics are associated (or correlated) with Aurora Cannabis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurora Cannabis has no effect on the direction of Aquestive Therapeutics i.e., Aquestive Therapeutics and Aurora Cannabis go up and down completely randomly.
Pair Corralation between Aquestive Therapeutics and Aurora Cannabis
Given the investment horizon of 90 days Aquestive Therapeutics is expected to generate 0.8 times more return on investment than Aurora Cannabis. However, Aquestive Therapeutics is 1.26 times less risky than Aurora Cannabis. It trades about 0.03 of its potential returns per unit of risk. Aurora Cannabis is currently generating about 0.03 per unit of risk. If you would invest 279.00 in Aquestive Therapeutics on November 2, 2024 and sell it today you would earn a total of 29.00 from holding Aquestive Therapeutics or generate 10.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aquestive Therapeutics vs. Aurora Cannabis
Performance |
| Timeline |
| Aquestive Therapeutics |
| Aurora Cannabis |
Aquestive Therapeutics and Aurora Cannabis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aquestive Therapeutics and Aurora Cannabis
The main advantage of trading using opposite Aquestive Therapeutics and Aurora Cannabis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aquestive Therapeutics position performs unexpectedly, Aurora Cannabis 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 Aurora Cannabis will offset losses from the drop in Aurora Cannabis' long position.| Aquestive Therapeutics vs. Evoke Pharma | Aquestive Therapeutics vs. Dynavax Technologies | Aquestive Therapeutics vs. Amphastar P | Aquestive Therapeutics vs. Lantheus Holdings |
| Aurora Cannabis vs. Canopy Growth Corp | Aurora Cannabis vs. SNDL Inc | Aurora Cannabis vs. Cronos Group | Aurora Cannabis vs. Curaleaf Holdings |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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