Correlation Between Aquestive Therapeutics and Astral Foods
Can any of the company-specific risk be diversified away by investing in both Aquestive Therapeutics and Astral Foods 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 Astral Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aquestive Therapeutics and Astral Foods Limited, you can compare the effects of market volatilities on Aquestive Therapeutics and Astral Foods 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 Astral Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aquestive Therapeutics and Astral Foods.
Diversification Opportunities for Aquestive Therapeutics and Astral Foods
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Aquestive and Astral is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Aquestive Therapeutics and Astral Foods Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astral Foods Limited 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 Astral Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astral Foods Limited has no effect on the direction of Aquestive Therapeutics i.e., Aquestive Therapeutics and Astral Foods go up and down completely randomly.
Pair Corralation between Aquestive Therapeutics and Astral Foods
Given the investment horizon of 90 days Aquestive Therapeutics is expected to generate 19.69 times more return on investment than Astral Foods. However, Aquestive Therapeutics is 19.69 times more volatile than Astral Foods Limited. It trades about 0.04 of its potential returns per unit of risk. Astral Foods Limited is currently generating about 0.06 per unit of risk. If you would invest 264.00 in Aquestive Therapeutics on November 3, 2024 and sell it today you would earn a total of 38.00 from holding Aquestive Therapeutics or generate 14.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Aquestive Therapeutics vs. Astral Foods Limited
Performance |
| Timeline |
| Aquestive Therapeutics |
| Astral Foods Limited |
Aquestive Therapeutics and Astral Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aquestive Therapeutics and Astral Foods
The main advantage of trading using opposite Aquestive Therapeutics and Astral Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aquestive Therapeutics position performs unexpectedly, Astral Foods 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 Astral Foods will offset losses from the drop in Astral Foods' long position.| Aquestive Therapeutics vs. Evoke Pharma | Aquestive Therapeutics vs. Dynavax Technologies | Aquestive Therapeutics vs. Amphastar P | Aquestive Therapeutics vs. Lantheus Holdings |
| Astral Foods vs. Austevoll Seafood ASA | Astral Foods vs. Golden Agri Resources | Astral Foods vs. SalMar ASA | Astral Foods vs. Wilmar International |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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