Correlation Between Aquestive Therapeutics and Sealed Air
Can any of the company-specific risk be diversified away by investing in both Aquestive Therapeutics and Sealed Air 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 Sealed Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aquestive Therapeutics and Sealed Air, you can compare the effects of market volatilities on Aquestive Therapeutics and Sealed Air 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 Sealed Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aquestive Therapeutics and Sealed Air.
Diversification Opportunities for Aquestive Therapeutics and Sealed Air
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aquestive and Sealed is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Aquestive Therapeutics and Sealed Air in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sealed Air 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 Sealed Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sealed Air has no effect on the direction of Aquestive Therapeutics i.e., Aquestive Therapeutics and Sealed Air go up and down completely randomly.
Pair Corralation between Aquestive Therapeutics and Sealed Air
Given the investment horizon of 90 days Aquestive Therapeutics is expected to generate 2.5 times more return on investment than Sealed Air. However, Aquestive Therapeutics is 2.5 times more volatile than Sealed Air. It trades about 0.09 of its potential returns per unit of risk. Sealed Air is currently generating about -0.02 per unit of risk. If you would invest 93.00 in Aquestive Therapeutics on August 31, 2024 and sell it today you would earn a total of 417.00 from holding Aquestive Therapeutics or generate 448.39% 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. Sealed Air
Performance |
| Timeline |
| Aquestive Therapeutics |
| Sealed Air |
Aquestive Therapeutics and Sealed Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aquestive Therapeutics and Sealed Air
The main advantage of trading using opposite Aquestive Therapeutics and Sealed Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aquestive Therapeutics position performs unexpectedly, Sealed Air 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 Sealed Air will offset losses from the drop in Sealed Air's long position.| Aquestive Therapeutics vs. Bausch Health Companies | Aquestive Therapeutics vs. Haleon plc | Aquestive Therapeutics vs. Intracellular Th |
| Sealed Air vs. Avery Dennison Corp | Sealed Air vs. International Paper | Sealed Air vs. Sonoco Products | Sealed Air vs. Packaging Corp of |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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