Correlation Between Aquestive Therapeutics and Alimera Sciences
Can any of the company-specific risk be diversified away by investing in both Aquestive Therapeutics and Alimera Sciences 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 Alimera Sciences into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aquestive Therapeutics and Alimera Sciences, you can compare the effects of market volatilities on Aquestive Therapeutics and Alimera Sciences 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 Alimera Sciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aquestive Therapeutics and Alimera Sciences.
Diversification Opportunities for Aquestive Therapeutics and Alimera Sciences
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aquestive and Alimera is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Aquestive Therapeutics and Alimera Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alimera Sciences 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 Alimera Sciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alimera Sciences has no effect on the direction of Aquestive Therapeutics i.e., Aquestive Therapeutics and Alimera Sciences go up and down completely randomly.
Pair Corralation between Aquestive Therapeutics and Alimera Sciences
Given the investment horizon of 90 days Aquestive Therapeutics is expected to generate 0.85 times more return on investment than Alimera Sciences. However, Aquestive Therapeutics is 1.18 times less risky than Alimera Sciences. It trades about 0.09 of its potential returns per unit of risk. Alimera Sciences is currently generating about 0.05 per unit of risk. If you would invest 94.00 in Aquestive Therapeutics on August 30, 2024 and sell it today you would earn a total of 422.00 from holding Aquestive Therapeutics or generate 448.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 89.49% |
| Values | Daily Returns |
Aquestive Therapeutics vs. Alimera Sciences
Performance |
| Timeline |
| Aquestive Therapeutics |
| Alimera Sciences |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
Aquestive Therapeutics and Alimera Sciences Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aquestive Therapeutics and Alimera Sciences
The main advantage of trading using opposite Aquestive Therapeutics and Alimera Sciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aquestive Therapeutics position performs unexpectedly, Alimera Sciences 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 Alimera Sciences will offset losses from the drop in Alimera Sciences' long position.| Aquestive Therapeutics vs. Evoke Pharma | Aquestive Therapeutics vs. Dynavax Technologies | Aquestive Therapeutics vs. Amphastar P | Aquestive Therapeutics vs. Lantheus Holdings |
| Alimera Sciences vs. Shuttle Pharmaceuticals | Alimera Sciences vs. Lifecore Biomedical | Alimera Sciences vs. Journey Medical Corp | Alimera Sciences vs. Organogenesis 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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