Correlation Between CF Industries and Aquestive Therapeutics
Can any of the company-specific risk be diversified away by investing in both CF Industries 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 CF Industries and Aquestive Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CF Industries Holdings and Aquestive Therapeutics, you can compare the effects of market volatilities on CF Industries 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 CF Industries with a short position of Aquestive Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of CF Industries and Aquestive Therapeutics.
Diversification Opportunities for CF Industries and Aquestive Therapeutics
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between CF Industries and Aquestive is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding CF Industries Holdings and Aquestive Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aquestive Therapeutics and CF Industries 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 CF Industries Holdings 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 CF Industries i.e., CF Industries and Aquestive Therapeutics go up and down completely randomly.
Pair Corralation between CF Industries and Aquestive Therapeutics
Allowing for the 90-day total investment horizon CF Industries is expected to generate 14.65 times less return on investment than Aquestive Therapeutics. But when comparing it to its historical volatility, CF Industries Holdings is 2.76 times less risky than Aquestive Therapeutics. It trades about 0.02 of its potential returns per unit of risk. Aquestive Therapeutics is currently generating about 0.09 of returns per unit of risk over similar time horizon. 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 | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
CF Industries Holdings vs. Aquestive Therapeutics
Performance |
| Timeline |
| CF Industries Holdings |
| Aquestive Therapeutics |
CF Industries and Aquestive Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CF Industries and Aquestive Therapeutics
The main advantage of trading using opposite CF Industries and Aquestive Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CF Industries 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.| CF Industries vs. Nutrien | CF Industries vs. Intrepid Potash | CF Industries vs. Corteva | CF Industries vs. ICL Israel Chemicals |
| Aquestive Therapeutics vs. Bausch Health Companies | Aquestive Therapeutics vs. Haleon plc | Aquestive Therapeutics vs. Intracellular Th |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Stocks Directory Find actively traded stocks across global markets |