Correlation Between Lucy Scientific and Aquestive Therapeutics
Can any of the company-specific risk be diversified away by investing in both Lucy Scientific 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 Lucy Scientific and Aquestive Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lucy Scientific Discovery and Aquestive Therapeutics, you can compare the effects of market volatilities on Lucy Scientific 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 Lucy Scientific with a short position of Aquestive Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lucy Scientific and Aquestive Therapeutics.
Diversification Opportunities for Lucy Scientific and Aquestive Therapeutics
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lucy and Aquestive is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Lucy Scientific Discovery and Aquestive Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aquestive Therapeutics and Lucy Scientific 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 Lucy Scientific Discovery 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 Lucy Scientific i.e., Lucy Scientific and Aquestive Therapeutics go up and down completely randomly.
Pair Corralation between Lucy Scientific and Aquestive Therapeutics
Given the investment horizon of 90 days Lucy Scientific Discovery is expected to generate 18.55 times more return on investment than Aquestive Therapeutics. However, Lucy Scientific is 18.55 times more volatile than Aquestive Therapeutics. It trades about 0.08 of its potential returns per unit of risk. Aquestive Therapeutics is currently generating about 0.09 per unit of risk. If you would invest 2,990 in Lucy Scientific Discovery on August 31, 2024 and sell it today you would lose (2,988) from holding Lucy Scientific Discovery or give up 99.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 82.22% |
| Values | Daily Returns |
Lucy Scientific Discovery vs. Aquestive Therapeutics
Performance |
| Timeline |
| Lucy Scientific Discovery |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Aquestive Therapeutics |
Lucy Scientific and Aquestive Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lucy Scientific and Aquestive Therapeutics
The main advantage of trading using opposite Lucy Scientific and Aquestive Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lucy Scientific 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.| Lucy Scientific vs. Shuttle Pharmaceuticals | Lucy Scientific vs. Lifecore Biomedical | Lucy Scientific vs. Journey Medical Corp | Lucy Scientific vs. Akanda Corp |
| 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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