Correlation Between WK Kellogg and Aquestive Therapeutics
Can any of the company-specific risk be diversified away by investing in both WK Kellogg 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 WK Kellogg and Aquestive Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WK Kellogg Co and Aquestive Therapeutics, you can compare the effects of market volatilities on WK Kellogg 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 WK Kellogg with a short position of Aquestive Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of WK Kellogg and Aquestive Therapeutics.
Diversification Opportunities for WK Kellogg and Aquestive Therapeutics
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between KLG and Aquestive is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding WK Kellogg Co and Aquestive Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aquestive Therapeutics and WK Kellogg 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 WK Kellogg Co 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 WK Kellogg i.e., WK Kellogg and Aquestive Therapeutics go up and down completely randomly.
Pair Corralation between WK Kellogg and Aquestive Therapeutics
Considering the 90-day investment horizon WK Kellogg is expected to generate 1.07 times less return on investment than Aquestive Therapeutics. But when comparing it to its historical volatility, WK Kellogg Co is 1.81 times less risky than Aquestive Therapeutics. It trades about 0.06 of its potential returns per unit of risk. Aquestive Therapeutics is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 264.00 in Aquestive Therapeutics on November 3, 2024 and sell it today you would earn a total of 38.00 from holding Aquestive Therapeutics or generate 14.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WK Kellogg Co vs. Aquestive Therapeutics
Performance |
| Timeline |
| WK Kellogg |
| Aquestive Therapeutics |
WK Kellogg and Aquestive Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WK Kellogg and Aquestive Therapeutics
The main advantage of trading using opposite WK Kellogg and Aquestive Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WK Kellogg 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.| WK Kellogg vs. PACCAR Inc | WK Kellogg vs. Universal Music Group | WK Kellogg vs. Genuine Parts Co | WK Kellogg vs. Warner Music Group |
| Aquestive Therapeutics vs. Evoke Pharma | Aquestive Therapeutics vs. Dynavax Technologies | Aquestive Therapeutics vs. Amphastar P | Aquestive Therapeutics vs. Lantheus Holdings |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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