Correlation Between Aquestive Therapeutics and Cresco Labs
Can any of the company-specific risk be diversified away by investing in both Aquestive Therapeutics and Cresco Labs 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 Cresco Labs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aquestive Therapeutics and Cresco Labs, you can compare the effects of market volatilities on Aquestive Therapeutics and Cresco Labs 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 Cresco Labs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aquestive Therapeutics and Cresco Labs.
Diversification Opportunities for Aquestive Therapeutics and Cresco Labs
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Aquestive and Cresco is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Aquestive Therapeutics and Cresco Labs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cresco Labs 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 Cresco Labs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cresco Labs has no effect on the direction of Aquestive Therapeutics i.e., Aquestive Therapeutics and Cresco Labs go up and down completely randomly.
Pair Corralation between Aquestive Therapeutics and Cresco Labs
Given the investment horizon of 90 days Aquestive Therapeutics is expected to generate 0.89 times more return on investment than Cresco Labs. However, Aquestive Therapeutics is 1.13 times less risky than Cresco Labs. It trades about 0.09 of its potential returns per unit of risk. Cresco Labs is currently generating about -0.01 per unit of risk. If you would invest 91.00 in Aquestive Therapeutics on August 24, 2024 and sell it today you would earn a total of 365.00 from holding Aquestive Therapeutics or generate 401.1% 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. Cresco Labs
Performance |
| Timeline |
| Aquestive Therapeutics |
| Cresco Labs |
Aquestive Therapeutics and Cresco Labs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aquestive Therapeutics and Cresco Labs
The main advantage of trading using opposite Aquestive Therapeutics and Cresco Labs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aquestive Therapeutics position performs unexpectedly, Cresco Labs 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 Cresco Labs will offset losses from the drop in Cresco Labs' long position.| Aquestive Therapeutics vs. Evoke Pharma | Aquestive Therapeutics vs. Dynavax Technologies | Aquestive Therapeutics vs. Amphastar P | Aquestive Therapeutics vs. Lantheus Holdings |
| Cresco Labs vs. Verano Holdings Corp | Cresco Labs vs. AYR Strategies Class | Cresco Labs vs. Green Thumb Industries | Cresco Labs vs. Marimed |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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