Correlation Between Tilray and Aquestive Therapeutics
Can any of the company-specific risk be diversified away by investing in both Tilray 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 Tilray and Aquestive Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tilray Inc and Aquestive Therapeutics, you can compare the effects of market volatilities on Tilray 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 Tilray with a short position of Aquestive Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tilray and Aquestive Therapeutics.
Diversification Opportunities for Tilray and Aquestive Therapeutics
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Tilray and Aquestive is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Tilray Inc and Aquestive Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aquestive Therapeutics and Tilray 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 Tilray 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 Tilray i.e., Tilray and Aquestive Therapeutics go up and down completely randomly.
Pair Corralation between Tilray and Aquestive Therapeutics
Given the investment horizon of 90 days Tilray Inc is expected to under-perform the Aquestive Therapeutics. But the stock apears to be less risky and, when comparing its historical volatility, Tilray Inc is 1.0 times less risky than Aquestive Therapeutics. The stock trades about 0.0 of its potential returns per unit of risk. The 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 |
Tilray Inc vs. Aquestive Therapeutics
Performance |
| Timeline |
| Tilray Inc |
| Aquestive Therapeutics |
Tilray and Aquestive Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tilray and Aquestive Therapeutics
The main advantage of trading using opposite Tilray and Aquestive Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tilray 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.The idea behind Tilray Inc and Aquestive Therapeutics pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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