Correlation Between Aquestive Therapeutics and Emergent Biosolutions
Can any of the company-specific risk be diversified away by investing in both Aquestive Therapeutics and Emergent Biosolutions 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 Emergent Biosolutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aquestive Therapeutics and Emergent Biosolutions, you can compare the effects of market volatilities on Aquestive Therapeutics and Emergent Biosolutions 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 Emergent Biosolutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aquestive Therapeutics and Emergent Biosolutions.
Diversification Opportunities for Aquestive Therapeutics and Emergent Biosolutions
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Aquestive and Emergent is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Aquestive Therapeutics and Emergent Biosolutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emergent Biosolutions 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 Emergent Biosolutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emergent Biosolutions has no effect on the direction of Aquestive Therapeutics i.e., Aquestive Therapeutics and Emergent Biosolutions go up and down completely randomly.
Pair Corralation between Aquestive Therapeutics and Emergent Biosolutions
Given the investment horizon of 90 days Aquestive Therapeutics is expected to generate 0.62 times more return on investment than Emergent Biosolutions. However, Aquestive Therapeutics is 1.62 times less risky than Emergent Biosolutions. It trades about 0.09 of its potential returns per unit of risk. Emergent Biosolutions is currently generating about 0.03 per unit of risk. If you would invest 94.00 in Aquestive Therapeutics on August 31, 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aquestive Therapeutics vs. Emergent Biosolutions
Performance |
| Timeline |
| Aquestive Therapeutics |
| Emergent Biosolutions |
Aquestive Therapeutics and Emergent Biosolutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aquestive Therapeutics and Emergent Biosolutions
The main advantage of trading using opposite Aquestive Therapeutics and Emergent Biosolutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aquestive Therapeutics position performs unexpectedly, Emergent Biosolutions 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 Emergent Biosolutions will offset losses from the drop in Emergent Biosolutions' long position.| Aquestive Therapeutics vs. Bausch Health Companies | Aquestive Therapeutics vs. Neurocrine Biosciences | Aquestive Therapeutics vs. Haleon plc | Aquestive Therapeutics vs. Intracellular Th |
| Emergent Biosolutions vs. Bausch Health Companies | Emergent Biosolutions vs. Neurocrine Biosciences | Emergent Biosolutions vs. Haleon plc | Emergent Biosolutions vs. Intracellular Th |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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