Correlation Between Aquestive Therapeutics and Belden

Can any of the company-specific risk be diversified away by investing in both Aquestive Therapeutics and Belden 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 Aquestive Therapeutics and Belden into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aquestive Therapeutics and Belden Inc, you can compare the effects of market volatilities on Aquestive Therapeutics and Belden 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 Aquestive Therapeutics with a short position of Belden. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aquestive Therapeutics and Belden.

Diversification Opportunities for Aquestive Therapeutics and Belden

0.67

Correlation Coefficient

Aquestive Therapeutics  Belden

Poor diversification

The 3 months correlation between Aquestive and Belden is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Aquestive Therapeutics and Belden Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Belden Inc and Aquestive Therapeutics 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 Aquestive Therapeutics are associated (or correlated) with Belden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Belden Inc has no effect on the direction of Aquestive Therapeutics i.e., Aquestive Therapeutics and Belden go up and down completely randomly.

Pair Corralation between Aquestive Therapeutics and Belden

Given the investment horizon of 90 days Aquestive Therapeutics is expected to generate 2.44 times more return on investment than Belden. However, Aquestive Therapeutics is 2.44 times more volatile than Belden Inc. It trades about -0.04 of its potential returns per unit of risk. Belden Inc is currently generating about -0.09 per unit of risk. If you would invest  359.00  in Aquestive Therapeutics on December 21, 2024 and sell it today you would lose (48.00) from holding Aquestive Therapeutics or give up 13.37% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.33%
Values	Daily Returns

Aquestive Therapeutics  vs.  Belden Inc

Aquestive Therapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aquestive Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Belden Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Belden Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Aquestive Therapeutics and Belden

The main advantage of trading using opposite Aquestive Therapeutics and Belden positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aquestive Therapeutics position performs unexpectedly, Belden 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 Belden will offset losses from the drop in Belden's long position.

The idea behind Aquestive Therapeutics and Belden Inc 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.

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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.