Correlation Between Tandem Diabetes and Aquestive Therapeutics
Can any of the company-specific risk be diversified away by investing in both Tandem Diabetes 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 Tandem Diabetes and Aquestive Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tandem Diabetes Care and Aquestive Therapeutics, you can compare the effects of market volatilities on Tandem Diabetes 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 Tandem Diabetes with a short position of Aquestive Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tandem Diabetes and Aquestive Therapeutics.
Diversification Opportunities for Tandem Diabetes and Aquestive Therapeutics
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Tandem and Aquestive is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Tandem Diabetes Care and Aquestive Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aquestive Therapeutics and Tandem Diabetes 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 Tandem Diabetes Care 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 Tandem Diabetes i.e., Tandem Diabetes and Aquestive Therapeutics go up and down completely randomly.
Pair Corralation between Tandem Diabetes and Aquestive Therapeutics
Given the investment horizon of 90 days Tandem Diabetes is expected to generate 6.06 times less return on investment than Aquestive Therapeutics. But when comparing it to its historical volatility, Tandem Diabetes Care is 1.23 times less risky than Aquestive Therapeutics. It trades about 0.02 of its potential returns per unit of risk. Aquestive Therapeutics is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 84.00 in Aquestive Therapeutics on November 2, 2024 and sell it today you would earn a total of 223.00 from holding Aquestive Therapeutics or generate 265.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tandem Diabetes Care vs. Aquestive Therapeutics
Performance |
| Timeline |
| Tandem Diabetes Care |
| Aquestive Therapeutics |
Tandem Diabetes and Aquestive Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tandem Diabetes and Aquestive Therapeutics
The main advantage of trading using opposite Tandem Diabetes and Aquestive Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tandem Diabetes 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.| Tandem Diabetes vs. Heart Test Laboratories | Tandem Diabetes vs. Inspira Technologies Oxy | Tandem Diabetes vs. TC BioPharm plc | Tandem Diabetes vs. bioAffinity Technologies Warrant |
| 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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