Correlation Between Aquestive Therapeutics and Sandstorm Gold
Can any of the company-specific risk be diversified away by investing in both Aquestive Therapeutics and Sandstorm Gold 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 Sandstorm Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aquestive Therapeutics and Sandstorm Gold Ltd, you can compare the effects of market volatilities on Aquestive Therapeutics and Sandstorm Gold 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 Sandstorm Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aquestive Therapeutics and Sandstorm Gold.
Diversification Opportunities for Aquestive Therapeutics and Sandstorm Gold
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aquestive and Sandstorm is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Aquestive Therapeutics and Sandstorm Gold Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sandstorm Gold 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 Sandstorm Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sandstorm Gold has no effect on the direction of Aquestive Therapeutics i.e., Aquestive Therapeutics and Sandstorm Gold go up and down completely randomly.
Pair Corralation between Aquestive Therapeutics and Sandstorm Gold
Given the investment horizon of 90 days Aquestive Therapeutics is expected to generate 2.26 times more return on investment than Sandstorm Gold. However, Aquestive Therapeutics is 2.26 times more volatile than Sandstorm Gold Ltd. It trades about 0.09 of its potential returns per unit of risk. Sandstorm Gold Ltd is currently generating about 0.04 per unit of risk. If you would invest 215.00 in Aquestive Therapeutics on September 2, 2024 and sell it today you would earn a total of 294.00 from holding Aquestive Therapeutics or generate 136.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aquestive Therapeutics vs. Sandstorm Gold Ltd
Performance |
| Timeline |
| Aquestive Therapeutics |
| Sandstorm Gold |
Aquestive Therapeutics and Sandstorm Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aquestive Therapeutics and Sandstorm Gold
The main advantage of trading using opposite Aquestive Therapeutics and Sandstorm Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aquestive Therapeutics position performs unexpectedly, Sandstorm Gold 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 Sandstorm Gold will offset losses from the drop in Sandstorm Gold's long position.| Aquestive Therapeutics vs. Evoke Pharma | Aquestive Therapeutics vs. Dynavax Technologies | Aquestive Therapeutics vs. Amphastar P | Aquestive Therapeutics vs. Lantheus Holdings |
| Sandstorm Gold vs. Fortitude Gold Corp | Sandstorm Gold vs. New Gold | Sandstorm Gold vs. Galiano Gold | Sandstorm Gold vs. GoldMining |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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