Correlation Between Zomedica Pharmaceuticals and Aquestive Therapeutics
Can any of the company-specific risk be diversified away by investing in both Zomedica Pharmaceuticals 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 Zomedica Pharmaceuticals and Aquestive Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zomedica Pharmaceuticals Corp and Aquestive Therapeutics, you can compare the effects of market volatilities on Zomedica Pharmaceuticals 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 Zomedica Pharmaceuticals with a short position of Aquestive Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zomedica Pharmaceuticals and Aquestive Therapeutics.
Diversification Opportunities for Zomedica Pharmaceuticals and Aquestive Therapeutics
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Zomedica and Aquestive is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Zomedica Pharmaceuticals Corp and Aquestive Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aquestive Therapeutics and Zomedica Pharmaceuticals 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 Zomedica Pharmaceuticals 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 Zomedica Pharmaceuticals i.e., Zomedica Pharmaceuticals and Aquestive Therapeutics go up and down completely randomly.
Pair Corralation between Zomedica Pharmaceuticals and Aquestive Therapeutics
Considering the 90-day investment horizon Zomedica Pharmaceuticals Corp is expected to generate 0.66 times more return on investment than Aquestive Therapeutics. However, Zomedica Pharmaceuticals Corp is 1.51 times less risky than Aquestive Therapeutics. It trades about -0.33 of its potential returns per unit of risk. Aquestive Therapeutics is currently generating about -0.31 per unit of risk. If you would invest 15.00 in Zomedica Pharmaceuticals Corp on September 14, 2024 and sell it today you would lose (2.70) from holding Zomedica Pharmaceuticals Corp or give up 18.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zomedica Pharmaceuticals Corp vs. Aquestive Therapeutics
Performance |
| Timeline |
| Zomedica Pharmaceuticals |
| Aquestive Therapeutics |
Zomedica Pharmaceuticals and Aquestive Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zomedica Pharmaceuticals and Aquestive Therapeutics
The main advantage of trading using opposite Zomedica Pharmaceuticals and Aquestive Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zomedica Pharmaceuticals 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.| Zomedica Pharmaceuticals vs. Tilray Inc | Zomedica Pharmaceuticals vs. Aurora Cannabis | Zomedica Pharmaceuticals vs. Canopy Growth Corp | Zomedica Pharmaceuticals vs. OrganiGram Holdings |
| 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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