Correlation Between Aquestive Therapeutics and Amgen
Can any of the company-specific risk be diversified away by investing in both Aquestive Therapeutics and Amgen 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 Amgen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aquestive Therapeutics and Amgen Inc, you can compare the effects of market volatilities on Aquestive Therapeutics and Amgen 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 Amgen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aquestive Therapeutics and Amgen.
Diversification Opportunities for Aquestive Therapeutics and Amgen
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aquestive and Amgen is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Aquestive Therapeutics and Amgen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amgen Inc 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 Amgen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amgen Inc has no effect on the direction of Aquestive Therapeutics i.e., Aquestive Therapeutics and Amgen go up and down completely randomly.
Pair Corralation between Aquestive Therapeutics and Amgen
Given the investment horizon of 90 days Aquestive Therapeutics is expected to under-perform the Amgen. In addition to that, Aquestive Therapeutics is 2.71 times more volatile than Amgen Inc. It trades about -0.28 of its total potential returns per unit of risk. Amgen Inc is currently generating about 0.41 per unit of volatility. If you would invest 25,928 in Amgen Inc on November 3, 2024 and sell it today you would earn a total of 2,614 from holding Amgen Inc or generate 10.08% 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. Amgen Inc
Performance |
| Timeline |
| Aquestive Therapeutics |
| Amgen Inc |
Aquestive Therapeutics and Amgen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aquestive Therapeutics and Amgen
The main advantage of trading using opposite Aquestive Therapeutics and Amgen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aquestive Therapeutics position performs unexpectedly, Amgen 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 Amgen will offset losses from the drop in Amgen's long position.| Aquestive Therapeutics vs. Evoke Pharma | Aquestive Therapeutics vs. Dynavax Technologies | Aquestive Therapeutics vs. Amphastar P | Aquestive Therapeutics vs. Lantheus 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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