Correlation Between Aquestive Therapeutics and Emerson Radio
Can any of the company-specific risk be diversified away by investing in both Aquestive Therapeutics and Emerson Radio 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 Emerson Radio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aquestive Therapeutics and Emerson Radio, you can compare the effects of market volatilities on Aquestive Therapeutics and Emerson Radio 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 Emerson Radio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aquestive Therapeutics and Emerson Radio.
Diversification Opportunities for Aquestive Therapeutics and Emerson Radio
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aquestive and Emerson is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Aquestive Therapeutics and Emerson Radio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerson Radio 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 Emerson Radio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerson Radio has no effect on the direction of Aquestive Therapeutics i.e., Aquestive Therapeutics and Emerson Radio go up and down completely randomly.
Pair Corralation between Aquestive Therapeutics and Emerson Radio
Given the investment horizon of 90 days Aquestive Therapeutics is expected to generate 1.56 times more return on investment than Emerson Radio. However, Aquestive Therapeutics is 1.56 times more volatile than Emerson Radio. It trades about 0.08 of its potential returns per unit of risk. Emerson Radio is currently generating about 0.01 per unit of risk. If you would invest 78.00 in Aquestive Therapeutics on November 19, 2024 and sell it today you would earn a total of 254.00 from holding Aquestive Therapeutics or generate 325.64% 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. Emerson Radio
Performance |
| Timeline |
| Aquestive Therapeutics |
| Emerson Radio |
Aquestive Therapeutics and Emerson Radio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aquestive Therapeutics and Emerson Radio
The main advantage of trading using opposite Aquestive Therapeutics and Emerson Radio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aquestive Therapeutics position performs unexpectedly, Emerson Radio 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 Emerson Radio will offset losses from the drop in Emerson Radio's long position.| Aquestive Therapeutics vs. Evoke Pharma | Aquestive Therapeutics vs. Dynavax Technologies | Aquestive Therapeutics vs. Amphastar P | Aquestive Therapeutics vs. Lantheus Holdings |
| Emerson Radio vs. VOXX International | Emerson Radio vs. LG Display Co | Emerson Radio vs. Koss Corporation | Emerson Radio vs. Wearable Devices |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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