Correlation Between Kenvue and Aquestive Therapeutics
Can any of the company-specific risk be diversified away by investing in both Kenvue 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 Kenvue and Aquestive Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kenvue Inc and Aquestive Therapeutics, you can compare the effects of market volatilities on Kenvue 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 Kenvue with a short position of Aquestive Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kenvue and Aquestive Therapeutics.
Diversification Opportunities for Kenvue and Aquestive Therapeutics
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kenvue and Aquestive is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Kenvue Inc and Aquestive Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aquestive Therapeutics and Kenvue 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 Kenvue Inc 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 Kenvue i.e., Kenvue and Aquestive Therapeutics go up and down completely randomly.
Pair Corralation between Kenvue and Aquestive Therapeutics
Given the investment horizon of 90 days Kenvue Inc is expected to under-perform the Aquestive Therapeutics. But the stock apears to be less risky and, when comparing its historical volatility, Kenvue Inc is 3.06 times less risky than Aquestive Therapeutics. The stock trades about -0.01 of its potential returns per unit of risk. The Aquestive Therapeutics is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 86.00 in Aquestive Therapeutics on September 14, 2024 and sell it today you would earn a total of 276.00 from holding Aquestive Therapeutics or generate 320.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 82.02% |
| Values | Daily Returns |
Kenvue Inc vs. Aquestive Therapeutics
Performance |
| Timeline |
| Kenvue Inc |
| Aquestive Therapeutics |
Kenvue and Aquestive Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kenvue and Aquestive Therapeutics
The main advantage of trading using opposite Kenvue and Aquestive Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kenvue 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.| Kenvue vs. Aquestive Therapeutics | Kenvue vs. U Power Limited | Kenvue vs. Avadel Pharmaceuticals PLC | Kenvue vs. Todos Medical |
| 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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