Correlation Between Aquestive Therapeutics and Electrovaya Common
Can any of the company-specific risk be diversified away by investing in both Aquestive Therapeutics and Electrovaya Common 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 Electrovaya Common into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aquestive Therapeutics and Electrovaya Common Shares, you can compare the effects of market volatilities on Aquestive Therapeutics and Electrovaya Common 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 Electrovaya Common. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aquestive Therapeutics and Electrovaya Common.
Diversification Opportunities for Aquestive Therapeutics and Electrovaya Common
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Aquestive and Electrovaya is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Aquestive Therapeutics and Electrovaya Common Shares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electrovaya Common Shares 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 Electrovaya Common. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electrovaya Common Shares has no effect on the direction of Aquestive Therapeutics i.e., Aquestive Therapeutics and Electrovaya Common go up and down completely randomly.
Pair Corralation between Aquestive Therapeutics and Electrovaya Common
Given the investment horizon of 90 days Aquestive Therapeutics is expected to under-perform the Electrovaya Common. But the stock apears to be less risky and, when comparing its historical volatility, Aquestive Therapeutics is 1.04 times less risky than Electrovaya Common. The stock trades about -0.06 of its potential returns per unit of risk. The Electrovaya Common Shares is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 206.00 in Electrovaya Common Shares on September 1, 2024 and sell it today you would earn a total of 58.00 from holding Electrovaya Common Shares or generate 28.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aquestive Therapeutics vs. Electrovaya Common Shares
Performance |
| Timeline |
| Aquestive Therapeutics |
| Electrovaya Common Shares |
Aquestive Therapeutics and Electrovaya Common Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aquestive Therapeutics and Electrovaya Common
The main advantage of trading using opposite Aquestive Therapeutics and Electrovaya Common positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aquestive Therapeutics position performs unexpectedly, Electrovaya Common 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 Electrovaya Common will offset losses from the drop in Electrovaya Common's long position.| Aquestive Therapeutics vs. Evoke Pharma | Aquestive Therapeutics vs. Dynavax Technologies | Aquestive Therapeutics vs. Amphastar P | Aquestive Therapeutics vs. Lantheus Holdings |
| Electrovaya Common vs. Bloom Energy Corp | Electrovaya Common vs. Microvast Holdings | Electrovaya Common vs. Solid Power | Electrovaya Common vs. FREYR Battery SA |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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