Correlation Between Aquestive Therapeutics and Sunshine Biopharma
Can any of the company-specific risk be diversified away by investing in both Aquestive Therapeutics and Sunshine Biopharma 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 Sunshine Biopharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aquestive Therapeutics and Sunshine Biopharma, you can compare the effects of market volatilities on Aquestive Therapeutics and Sunshine Biopharma 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 Sunshine Biopharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aquestive Therapeutics and Sunshine Biopharma.
Diversification Opportunities for Aquestive Therapeutics and Sunshine Biopharma
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Aquestive and Sunshine is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Aquestive Therapeutics and Sunshine Biopharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunshine Biopharma 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 Sunshine Biopharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunshine Biopharma has no effect on the direction of Aquestive Therapeutics i.e., Aquestive Therapeutics and Sunshine Biopharma go up and down completely randomly.
Pair Corralation between Aquestive Therapeutics and Sunshine Biopharma
Given the investment horizon of 90 days Aquestive Therapeutics is expected to generate 0.5 times more return on investment than Sunshine Biopharma. However, Aquestive Therapeutics is 1.99 times less risky than Sunshine Biopharma. It trades about 0.09 of its potential returns per unit of risk. Sunshine Biopharma is currently generating about -0.07 per unit of risk. If you would invest 94.00 in Aquestive Therapeutics on August 30, 2024 and sell it today you would earn a total of 422.00 from holding Aquestive Therapeutics or generate 448.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Aquestive Therapeutics vs. Sunshine Biopharma
Performance |
| Timeline |
| Aquestive Therapeutics |
| Sunshine Biopharma |
Aquestive Therapeutics and Sunshine Biopharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aquestive Therapeutics and Sunshine Biopharma
The main advantage of trading using opposite Aquestive Therapeutics and Sunshine Biopharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aquestive Therapeutics position performs unexpectedly, Sunshine Biopharma 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 Sunshine Biopharma will offset losses from the drop in Sunshine Biopharma's long position.| Aquestive Therapeutics vs. Evoke Pharma | Aquestive Therapeutics vs. Dynavax Technologies | Aquestive Therapeutics vs. Amphastar P | Aquestive Therapeutics vs. Lantheus Holdings |
| Sunshine Biopharma vs. Shionogi Co Ltd | Sunshine Biopharma vs. China SXT Pharmaceuticals | Sunshine Biopharma vs. Shuttle Pharmaceuticals | Sunshine Biopharma vs. Lifecore Biomedical |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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