Correlation Between United States and Aquestive Therapeutics
Can any of the company-specific risk be diversified away by investing in both United States 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 United States and Aquestive Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United States Steel and Aquestive Therapeutics, you can compare the effects of market volatilities on United States 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 United States with a short position of Aquestive Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of United States and Aquestive Therapeutics.
Diversification Opportunities for United States and Aquestive Therapeutics
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between United and Aquestive is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding United States Steel and Aquestive Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aquestive Therapeutics and United States 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 United States Steel 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 United States i.e., United States and Aquestive Therapeutics go up and down completely randomly.
Pair Corralation between United States and Aquestive Therapeutics
Taking into account the 90-day investment horizon United States Steel is expected to generate 0.73 times more return on investment than Aquestive Therapeutics. However, United States Steel is 1.37 times less risky than Aquestive Therapeutics. It trades about 0.09 of its potential returns per unit of risk. Aquestive Therapeutics is currently generating about -0.06 per unit of risk. If you would invest 3,858 in United States Steel on September 2, 2024 and sell it today you would earn a total of 219.00 from holding United States Steel or generate 5.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United States Steel vs. Aquestive Therapeutics
Performance |
| Timeline |
| United States Steel |
| Aquestive Therapeutics |
United States and Aquestive Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United States and Aquestive Therapeutics
The main advantage of trading using opposite United States and Aquestive Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United States 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.| United States vs. Fortitude Gold Corp | United States vs. New Gold | United States vs. Galiano Gold | United States vs. GoldMining |
| 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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