Correlation Between Trulieve Cannabis and Aquestive Therapeutics
Can any of the company-specific risk be diversified away by investing in both Trulieve Cannabis 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 Trulieve Cannabis and Aquestive Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trulieve Cannabis Corp and Aquestive Therapeutics, you can compare the effects of market volatilities on Trulieve Cannabis 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 Trulieve Cannabis with a short position of Aquestive Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trulieve Cannabis and Aquestive Therapeutics.
Diversification Opportunities for Trulieve Cannabis and Aquestive Therapeutics
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Trulieve and Aquestive is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Trulieve Cannabis Corp and Aquestive Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aquestive Therapeutics and Trulieve Cannabis 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 Trulieve Cannabis Corp 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 Trulieve Cannabis i.e., Trulieve Cannabis and Aquestive Therapeutics go up and down completely randomly.
Pair Corralation between Trulieve Cannabis and Aquestive Therapeutics
Assuming the 90 days horizon Trulieve Cannabis Corp is expected to under-perform the Aquestive Therapeutics. In addition to that, Trulieve Cannabis is 2.47 times more volatile than Aquestive Therapeutics. It trades about -0.24 of its total potential returns per unit of risk. Aquestive Therapeutics is currently generating about -0.12 per unit of volatility. If you would invest 549.00 in Aquestive Therapeutics on August 28, 2024 and sell it today you would lose (68.00) from holding Aquestive Therapeutics or give up 12.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Trulieve Cannabis Corp vs. Aquestive Therapeutics
Performance |
| Timeline |
| Trulieve Cannabis Corp |
| Aquestive Therapeutics |
Trulieve Cannabis and Aquestive Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trulieve Cannabis and Aquestive Therapeutics
The main advantage of trading using opposite Trulieve Cannabis and Aquestive Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trulieve Cannabis 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.| Trulieve Cannabis vs. Green Thumb Industries | Trulieve Cannabis vs. Curaleaf Holdings | Trulieve Cannabis vs. Cresco Labs | Trulieve Cannabis vs. GrowGeneration Corp |
| 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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