Correlation Between Aquestive Therapeutics and LENSAR

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

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

Diversification Opportunities for Aquestive Therapeutics and LENSAR

-0.81

Correlation Coefficient

Aquestive Therapeutics  LENSAR

Pay attention - limited upside

The 3 months correlation between Aquestive and LENSAR is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Aquestive Therapeutics and LENSAR Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LENSAR 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 LENSAR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LENSAR Inc has no effect on the direction of Aquestive Therapeutics i.e., Aquestive Therapeutics and LENSAR go up and down completely randomly.

Pair Corralation between Aquestive Therapeutics and LENSAR

Given the investment horizon of 90 days Aquestive Therapeutics is expected to under-perform the LENSAR. In addition to that, Aquestive Therapeutics is 1.04 times more volatile than LENSAR Inc. It trades about -0.23 of its total potential returns per unit of risk. LENSAR Inc is currently generating about -0.05 per unit of volatility. If you would invest  865.00  in LENSAR Inc on October 22, 2024 and sell it today you would lose (33.00) from holding LENSAR Inc or give up 3.82% of portfolio value over 90 days.

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

Aquestive Therapeutics  vs.  LENSAR Inc

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 February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

LENSAR Inc

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in LENSAR Inc are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain basic indicators, LENSAR reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aquestive Therapeutics and LENSAR

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

The idea behind Aquestive Therapeutics and LENSAR 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.

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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.