Correlation Between Aquestive Therapeutics and CV Sciences
Can any of the company-specific risk be diversified away by investing in both Aquestive Therapeutics and CV 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 CV 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 CV Sciences, you can compare the effects of market volatilities on Aquestive Therapeutics and CV 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 CV Sciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aquestive Therapeutics and CV Sciences.
Diversification Opportunities for Aquestive Therapeutics and CV Sciences
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Aquestive and CVSI is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Aquestive Therapeutics and CV Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CV 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 CV Sciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CV Sciences has no effect on the direction of Aquestive Therapeutics i.e., Aquestive Therapeutics and CV Sciences go up and down completely randomly.
Pair Corralation between Aquestive Therapeutics and CV Sciences
Given the investment horizon of 90 days Aquestive Therapeutics is expected to generate 0.59 times more return on investment than CV Sciences. However, Aquestive Therapeutics is 1.69 times less risky than CV Sciences. It trades about 0.01 of its potential returns per unit of risk. CV Sciences is currently generating about 0.0 per unit of risk. If you would invest 299.00 in Aquestive Therapeutics on November 27, 2024 and sell it today you would lose (3.00) from holding Aquestive Therapeutics or give up 1.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aquestive Therapeutics vs. CV Sciences
Performance |
| Timeline |
| Aquestive Therapeutics |
| CV Sciences |
Aquestive Therapeutics and CV Sciences Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aquestive Therapeutics and CV Sciences
The main advantage of trading using opposite Aquestive Therapeutics and CV Sciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aquestive Therapeutics position performs unexpectedly, CV 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 CV Sciences will offset losses from the drop in CV Sciences' long position.| Aquestive Therapeutics vs. Evoke Pharma | Aquestive Therapeutics vs. Dynavax Technologies | Aquestive Therapeutics vs. Amphastar P | Aquestive Therapeutics vs. Lantheus Holdings |
| CV Sciences vs. Marimed | CV Sciences vs. General Cannabis Corp | CV Sciences vs. American Cannabis | CV Sciences vs. Cannabis Sativa |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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