Correlation Between Aquestive Therapeutics and Griffon
Can any of the company-specific risk be diversified away by investing in both Aquestive Therapeutics and Griffon 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 Griffon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aquestive Therapeutics and Griffon, you can compare the effects of market volatilities on Aquestive Therapeutics and Griffon 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 Griffon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aquestive Therapeutics and Griffon.
Diversification Opportunities for Aquestive Therapeutics and Griffon
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Aquestive and Griffon is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Aquestive Therapeutics and Griffon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Griffon 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 Griffon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Griffon has no effect on the direction of Aquestive Therapeutics i.e., Aquestive Therapeutics and Griffon go up and down completely randomly.
Pair Corralation between Aquestive Therapeutics and Griffon
Given the investment horizon of 90 days Aquestive Therapeutics is expected to under-perform the Griffon. In addition to that, Aquestive Therapeutics is 1.0 times more volatile than Griffon. It trades about -0.05 of its total potential returns per unit of risk. Griffon is currently generating about 0.3 per unit of volatility. If you would invest 6,339 in Griffon on September 4, 2024 and sell it today you would earn a total of 1,927 from holding Griffon or generate 30.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aquestive Therapeutics vs. Griffon
Performance |
| Timeline |
| Aquestive Therapeutics |
| Griffon |
Aquestive Therapeutics and Griffon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aquestive Therapeutics and Griffon
The main advantage of trading using opposite Aquestive Therapeutics and Griffon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aquestive Therapeutics position performs unexpectedly, Griffon 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 Griffon will offset losses from the drop in Griffon's long position.| Aquestive Therapeutics vs. Evoke Pharma | Aquestive Therapeutics vs. Dynavax Technologies | Aquestive Therapeutics vs. Amphastar P | Aquestive Therapeutics vs. Lantheus Holdings |
| Griffon vs. Steel Partners Holdings | Griffon vs. Brookfield Business Partners | Griffon vs. Tejon Ranch Co | Griffon vs. Compass Diversified Holdings |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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