Correlation Between Aquestive Therapeutics and ICC Holdings

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

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

Diversification Opportunities for Aquestive Therapeutics and ICC Holdings

-0.5

Correlation Coefficient

Aquestive Therapeutics  ICC Holdings

Very good diversification

The 3 months correlation between Aquestive and ICC is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Aquestive Therapeutics and ICC Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ICC Holdings 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 ICC Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ICC Holdings has no effect on the direction of Aquestive Therapeutics i.e., Aquestive Therapeutics and ICC Holdings go up and down completely randomly.

Pair Corralation between Aquestive Therapeutics and ICC Holdings

Given the investment horizon of 90 days Aquestive Therapeutics is expected to under-perform the ICC Holdings. In addition to that, Aquestive Therapeutics is 6.69 times more volatile than ICC Holdings. It trades about -0.11 of its total potential returns per unit of risk. ICC Holdings is currently generating about 0.09 per unit of volatility. If you would invest  2,297  in ICC Holdings on September 24, 2024 and sell it today you would earn a total of  68.00  from holding ICC Holdings or generate 2.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	89.23%
Values	Daily Returns

Aquestive Therapeutics  vs.  ICC Holdings

Aquestive Therapeutics

Risk-Adjusted Performance

0 of 100

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 conflicting performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

ICC Holdings

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ICC Holdings are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong fundamental indicators, ICC Holdings is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Aquestive Therapeutics and ICC Holdings

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

The idea behind Aquestive Therapeutics and ICC Holdings 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.