Correlation Between Aquestive Therapeutics and Eterna Therapeutics
Can any of the company-specific risk be diversified away by investing in both Aquestive Therapeutics and Eterna Therapeutics 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 Eterna Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aquestive Therapeutics and Eterna Therapeutics, you can compare the effects of market volatilities on Aquestive Therapeutics and Eterna Therapeutics 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 Eterna Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aquestive Therapeutics and Eterna Therapeutics.
Diversification Opportunities for Aquestive Therapeutics and Eterna Therapeutics
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Aquestive and Eterna is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Aquestive Therapeutics and Eterna Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eterna Therapeutics 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 Eterna Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eterna Therapeutics has no effect on the direction of Aquestive Therapeutics i.e., Aquestive Therapeutics and Eterna Therapeutics go up and down completely randomly.
Pair Corralation between Aquestive Therapeutics and Eterna Therapeutics
Given the investment horizon of 90 days Aquestive Therapeutics is expected to generate 0.67 times more return on investment than Eterna Therapeutics. However, Aquestive Therapeutics is 1.49 times less risky than Eterna Therapeutics. It trades about 0.04 of its potential returns per unit of risk. Eterna Therapeutics is currently generating about -0.05 per unit of risk. If you would invest 174.00 in Aquestive Therapeutics on January 9, 2025 and sell it today you would earn a total of 82.50 from holding Aquestive Therapeutics or generate 47.41% 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. Eterna Therapeutics
Performance |
| Timeline |
| Aquestive Therapeutics |
| Eterna Therapeutics |
Aquestive Therapeutics and Eterna Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aquestive Therapeutics and Eterna Therapeutics
The main advantage of trading using opposite Aquestive Therapeutics and Eterna Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aquestive Therapeutics position performs unexpectedly, Eterna Therapeutics 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 Eterna Therapeutics will offset losses from the drop in Eterna Therapeutics' long position.| Aquestive Therapeutics vs. Evoke Pharma | Aquestive Therapeutics vs. Dynavax Technologies | Aquestive Therapeutics vs. Amphastar P | Aquestive Therapeutics vs. Lantheus Holdings |
| Eterna Therapeutics vs. Arcus Biosciences | Eterna Therapeutics vs. Cullinan Oncology LLC | Eterna Therapeutics vs. Annexon | Eterna Therapeutics vs. Structure Therapeutics American |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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