Correlation Between Aquestive Therapeutics and 278642AZ6

Can any of the company-specific risk be diversified away by investing in both Aquestive Therapeutics and 278642AZ6 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 278642AZ6 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aquestive Therapeutics and EBAY INC, you can compare the effects of market volatilities on Aquestive Therapeutics and 278642AZ6 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 278642AZ6. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aquestive Therapeutics and 278642AZ6.

Diversification Opportunities for Aquestive Therapeutics and 278642AZ6

0.27

Correlation Coefficient

Aquestive Therapeutics  278642AZ6

Modest diversification

The 3 months correlation between Aquestive and 278642AZ6 is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Aquestive Therapeutics and EBAY INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 278642AZ6 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 278642AZ6. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 278642AZ6 has no effect on the direction of Aquestive Therapeutics i.e., Aquestive Therapeutics and 278642AZ6 go up and down completely randomly.

Pair Corralation between Aquestive Therapeutics and 278642AZ6

Given the investment horizon of 90 days Aquestive Therapeutics is expected to under-perform the 278642AZ6. In addition to that, Aquestive Therapeutics is 4.38 times more volatile than EBAY INC. It trades about -0.2 of its total potential returns per unit of risk. EBAY INC is currently generating about -0.05 per unit of volatility. If you would invest  7,474  in EBAY INC on December 2, 2024 and sell it today you would lose (166.00) from holding EBAY INC or give up 2.22% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	72.13%
Values	Daily Returns

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

278642AZ6

Risk-Adjusted Performance

Very Weak

Over the last 90 days EBAY INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 278642AZ6 is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Aquestive Therapeutics and 278642AZ6

The main advantage of trading using opposite Aquestive Therapeutics and 278642AZ6 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aquestive Therapeutics position performs unexpectedly, 278642AZ6 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 278642AZ6 will offset losses from the drop in 278642AZ6's long position.

The idea behind Aquestive Therapeutics and EBAY 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.