Correlation Between Aquestive Therapeutics and Connect Biopharma
Can any of the company-specific risk be diversified away by investing in both Aquestive Therapeutics and Connect Biopharma 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 Connect Biopharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aquestive Therapeutics and Connect Biopharma Holdings, you can compare the effects of market volatilities on Aquestive Therapeutics and Connect Biopharma 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 Connect Biopharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aquestive Therapeutics and Connect Biopharma.
Diversification Opportunities for Aquestive Therapeutics and Connect Biopharma
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Aquestive and Connect is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Aquestive Therapeutics and Connect Biopharma Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Connect Biopharma 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 Connect Biopharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Connect Biopharma has no effect on the direction of Aquestive Therapeutics i.e., Aquestive Therapeutics and Connect Biopharma go up and down completely randomly.
Pair Corralation between Aquestive Therapeutics and Connect Biopharma
Given the investment horizon of 90 days Aquestive Therapeutics is expected to generate 0.7 times more return on investment than Connect Biopharma. However, Aquestive Therapeutics is 1.44 times less risky than Connect Biopharma. It trades about 0.09 of its potential returns per unit of risk. Connect Biopharma Holdings is currently generating about 0.05 per unit of risk. If you would invest 197.00 in Aquestive Therapeutics on September 4, 2024 and sell it today you would earn a total of 242.00 from holding Aquestive Therapeutics or generate 122.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aquestive Therapeutics vs. Connect Biopharma Holdings
Performance |
| Timeline |
| Aquestive Therapeutics |
| Connect Biopharma |
Aquestive Therapeutics and Connect Biopharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aquestive Therapeutics and Connect Biopharma
The main advantage of trading using opposite Aquestive Therapeutics and Connect Biopharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aquestive Therapeutics position performs unexpectedly, Connect Biopharma 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 Connect Biopharma will offset losses from the drop in Connect Biopharma's long position.| Aquestive Therapeutics vs. Evoke Pharma | Aquestive Therapeutics vs. Dynavax Technologies | Aquestive Therapeutics vs. Amphastar P | Aquestive Therapeutics vs. Lantheus Holdings |
| Connect Biopharma vs. Assembly Biosciences | Connect Biopharma vs. Instil Bio | Connect Biopharma vs. CytomX Therapeutics | Connect Biopharma vs. Achilles Therapeutics PLC |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |