Correlation Between Aquestive Therapeutics and XChange TECINC
Can any of the company-specific risk be diversified away by investing in both Aquestive Therapeutics and XChange TECINC 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 XChange TECINC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aquestive Therapeutics and XChange TECINC, you can compare the effects of market volatilities on Aquestive Therapeutics and XChange TECINC 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 XChange TECINC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aquestive Therapeutics and XChange TECINC.
Diversification Opportunities for Aquestive Therapeutics and XChange TECINC
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aquestive and XChange is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Aquestive Therapeutics and XChange TECINC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XChange TECINC 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 XChange TECINC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XChange TECINC has no effect on the direction of Aquestive Therapeutics i.e., Aquestive Therapeutics and XChange TECINC go up and down completely randomly.
Pair Corralation between Aquestive Therapeutics and XChange TECINC
Given the investment horizon of 90 days Aquestive Therapeutics is expected to generate 0.33 times more return on investment than XChange TECINC. However, Aquestive Therapeutics is 3.03 times less risky than XChange TECINC. It trades about 0.09 of its potential returns per unit of risk. XChange TECINC is currently generating about -0.03 per unit of risk. If you would invest 92.00 in Aquestive Therapeutics on September 4, 2024 and sell it today you would earn a total of 389.00 from holding Aquestive Therapeutics or generate 422.83% 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. XChange TECINC
Performance |
| Timeline |
| Aquestive Therapeutics |
| XChange TECINC |
Aquestive Therapeutics and XChange TECINC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aquestive Therapeutics and XChange TECINC
The main advantage of trading using opposite Aquestive Therapeutics and XChange TECINC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aquestive Therapeutics position performs unexpectedly, XChange TECINC 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 XChange TECINC will offset losses from the drop in XChange TECINC's long position.| Aquestive Therapeutics vs. Evoke Pharma | Aquestive Therapeutics vs. Dynavax Technologies | Aquestive Therapeutics vs. Amphastar P | Aquestive Therapeutics vs. Lantheus Holdings |
| XChange TECINC vs. Relx PLC ADR | XChange TECINC vs. Sealed Air | XChange TECINC vs. Afya | XChange TECINC vs. Skillful Craftsman Education |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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