Correlation Between Aquestive Therapeutics and Intchains Group

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

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

Diversification Opportunities for Aquestive Therapeutics and Intchains Group

-0.51

Correlation Coefficient

Aquestive Therapeutics  Intchains Group

Excellent diversification

The 3 months correlation between Aquestive and Intchains is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Aquestive Therapeutics and Intchains Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intchains Group 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 Intchains Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intchains Group has no effect on the direction of Aquestive Therapeutics i.e., Aquestive Therapeutics and Intchains Group go up and down completely randomly.

Pair Corralation between Aquestive Therapeutics and Intchains Group

Given the investment horizon of 90 days Aquestive Therapeutics is expected to under-perform the Intchains Group. But the stock apears to be less risky and, when comparing its historical volatility, Aquestive Therapeutics is 5.87 times less risky than Intchains Group. The stock trades about -0.4 of its potential returns per unit of risk. The Intchains Group Limited is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  444.00  in Intchains Group Limited on September 29, 2024 and sell it today you would earn a total of  489.00  from holding Intchains Group Limited or generate 110.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

Aquestive Therapeutics  vs.  Intchains Group Limited

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 unsteady 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.

Intchains Group

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Intchains Group Limited are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent fundamental indicators, Intchains Group reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aquestive Therapeutics and Intchains Group

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

The idea behind Aquestive Therapeutics and Intchains Group Limited 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.