Correlation Between Aquestive Therapeutics and Flex
Can any of the company-specific risk be diversified away by investing in both Aquestive Therapeutics and Flex 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 Flex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aquestive Therapeutics and Flex, you can compare the effects of market volatilities on Aquestive Therapeutics and Flex 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 Flex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aquestive Therapeutics and Flex.
Diversification Opportunities for Aquestive Therapeutics and Flex
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Aquestive and Flex is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Aquestive Therapeutics and Flex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flex 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 Flex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flex has no effect on the direction of Aquestive Therapeutics i.e., Aquestive Therapeutics and Flex go up and down completely randomly.
Pair Corralation between Aquestive Therapeutics and Flex
Given the investment horizon of 90 days Aquestive Therapeutics is expected to under-perform the Flex. In addition to that, Aquestive Therapeutics is 1.59 times more volatile than Flex. It trades about -0.07 of its total potential returns per unit of risk. Flex is currently generating about 0.19 per unit of volatility. If you would invest 3,467 in Flex on August 30, 2024 and sell it today you would earn a total of 415.00 from holding Flex or generate 11.97% 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. Flex
Performance |
| Timeline |
| Aquestive Therapeutics |
| Flex |
Aquestive Therapeutics and Flex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aquestive Therapeutics and Flex
The main advantage of trading using opposite Aquestive Therapeutics and Flex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aquestive Therapeutics position performs unexpectedly, Flex 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 Flex will offset losses from the drop in Flex's long position.| Aquestive Therapeutics vs. Emergent Biosolutions | Aquestive Therapeutics vs. Bausch Health Companies | Aquestive Therapeutics vs. Neurocrine Biosciences | Aquestive Therapeutics vs. Teva Pharma Industries |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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