Correlation Between Aquestive Therapeutics and Journey Medical

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

By analyzing existing cross correlation between Aquestive Therapeutics and Journey Medical Corp, you can compare the effects of market volatilities on Aquestive Therapeutics and Journey Medical 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 Journey Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aquestive Therapeutics and Journey Medical.

Diversification Opportunities for Aquestive Therapeutics and Journey Medical

-0.37

Correlation Coefficient

Aquestive Therapeutics  Journey Medical

Very good diversification

The 3 months correlation between Aquestive and Journey is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Aquestive Therapeutics and Journey Medical Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Journey Medical Corp 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 Journey Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Journey Medical Corp has no effect on the direction of Aquestive Therapeutics i.e., Aquestive Therapeutics and Journey Medical go up and down completely randomly.

Pair Corralation between Aquestive Therapeutics and Journey Medical

Given the investment horizon of 90 days Aquestive Therapeutics is expected to under-perform the Journey Medical. But the stock apears to be less risky and, when comparing its historical volatility, Aquestive Therapeutics is 1.04 times less risky than Journey Medical. The stock trades about -0.04 of its potential returns per unit of risk. The Journey Medical Corp is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  397.00  in Journey Medical Corp on December 29, 2024 and sell it today you would earn a total of  214.00  from holding Journey Medical Corp or generate 53.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Aquestive Therapeutics  vs.  Journey Medical Corp

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.

Journey Medical Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Journey Medical Corp are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting basic indicators, Journey Medical displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aquestive Therapeutics and Journey Medical

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

The idea behind Aquestive Therapeutics and Journey Medical Corp 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.