Correlation Between Capricor Therapeutics and Aquestive Therapeutics
Can any of the company-specific risk be diversified away by investing in both Capricor Therapeutics and Aquestive Therapeutics 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 Capricor Therapeutics and Aquestive Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capricor Therapeutics and Aquestive Therapeutics, you can compare the effects of market volatilities on Capricor Therapeutics and Aquestive Therapeutics 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 Capricor Therapeutics with a short position of Aquestive Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capricor Therapeutics and Aquestive Therapeutics.
Diversification Opportunities for Capricor Therapeutics and Aquestive Therapeutics
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Capricor and Aquestive is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Capricor Therapeutics and Aquestive Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aquestive Therapeutics and Capricor 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 Capricor Therapeutics are associated (or correlated) with Aquestive Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aquestive Therapeutics has no effect on the direction of Capricor Therapeutics i.e., Capricor Therapeutics and Aquestive Therapeutics go up and down completely randomly.
Pair Corralation between Capricor Therapeutics and Aquestive Therapeutics
Given the investment horizon of 90 days Capricor Therapeutics is expected to under-perform the Aquestive Therapeutics. But the stock apears to be less risky and, when comparing its historical volatility, Capricor Therapeutics is 1.06 times less risky than Aquestive Therapeutics. The stock trades about -0.11 of its potential returns per unit of risk. The Aquestive Therapeutics is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest 549.00 in Aquestive Therapeutics on August 29, 2024 and sell it today you would lose (61.00) from holding Aquestive Therapeutics or give up 11.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capricor Therapeutics vs. Aquestive Therapeutics
Performance |
| Timeline |
| Capricor Therapeutics |
| Aquestive Therapeutics |
Capricor Therapeutics and Aquestive Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capricor Therapeutics and Aquestive Therapeutics
The main advantage of trading using opposite Capricor Therapeutics and Aquestive Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capricor Therapeutics position performs unexpectedly, Aquestive Therapeutics 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 Aquestive Therapeutics will offset losses from the drop in Aquestive Therapeutics' long position.| Capricor Therapeutics vs. Eliem Therapeutics | Capricor Therapeutics vs. Scpharmaceuticals | Capricor Therapeutics vs. Milestone Pharmaceuticals | Capricor Therapeutics vs. Seres Therapeutics |
| Aquestive Therapeutics vs. Capricor Therapeutics | Aquestive Therapeutics vs. Soleno Therapeutics | Aquestive Therapeutics vs. Bio Path Holdings | Aquestive Therapeutics vs. Moleculin Biotech |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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