Correlation Between Aquestive Therapeutics and HUTCHMED DRC
Can any of the company-specific risk be diversified away by investing in both Aquestive Therapeutics and HUTCHMED DRC 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 HUTCHMED DRC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aquestive Therapeutics and HUTCHMED DRC, you can compare the effects of market volatilities on Aquestive Therapeutics and HUTCHMED DRC 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 HUTCHMED DRC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aquestive Therapeutics and HUTCHMED DRC.
Diversification Opportunities for Aquestive Therapeutics and HUTCHMED DRC
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Aquestive and HUTCHMED is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Aquestive Therapeutics and HUTCHMED DRC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUTCHMED DRC 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 HUTCHMED DRC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HUTCHMED DRC has no effect on the direction of Aquestive Therapeutics i.e., Aquestive Therapeutics and HUTCHMED DRC go up and down completely randomly.
Pair Corralation between Aquestive Therapeutics and HUTCHMED DRC
Given the investment horizon of 90 days Aquestive Therapeutics is expected to generate 1.33 times more return on investment than HUTCHMED DRC. However, Aquestive Therapeutics is 1.33 times more volatile than HUTCHMED DRC. It trades about 0.05 of its potential returns per unit of risk. HUTCHMED DRC is currently generating about 0.02 per unit of risk. If you would invest 407.00 in Aquestive Therapeutics on September 3, 2024 and sell it today you would earn a total of 102.00 from holding Aquestive Therapeutics or generate 25.06% 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. HUTCHMED DRC
Performance |
| Timeline |
| Aquestive Therapeutics |
| HUTCHMED DRC |
Aquestive Therapeutics and HUTCHMED DRC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aquestive Therapeutics and HUTCHMED DRC
The main advantage of trading using opposite Aquestive Therapeutics and HUTCHMED DRC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aquestive Therapeutics position performs unexpectedly, HUTCHMED DRC 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 HUTCHMED DRC will offset losses from the drop in HUTCHMED DRC's long position.| Aquestive Therapeutics vs. Connect Biopharma Holdings | Aquestive Therapeutics vs. Acumen Pharmaceuticals | Aquestive Therapeutics vs. Nuvation Bio | Aquestive Therapeutics vs. Eledon Pharmaceuticals |
| HUTCHMED DRC vs. Connect Biopharma Holdings | HUTCHMED DRC vs. Acumen Pharmaceuticals | HUTCHMED DRC vs. Nuvation Bio | HUTCHMED DRC vs. Eledon Pharmaceuticals |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |