Correlation Between Aquestive Therapeutics and YXTCOM GROUP

Can any of the company-specific risk be diversified away by investing in both Aquestive Therapeutics and YXTCOM 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 YXTCOM 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 YXTCOM GROUP HOLDING, you can compare the effects of market volatilities on Aquestive Therapeutics and YXTCOM 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 YXTCOM GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aquestive Therapeutics and YXTCOM GROUP.

Diversification Opportunities for Aquestive Therapeutics and YXTCOM GROUP

0.14

Correlation Coefficient

Aquestive Therapeutics  YXTCOM GROUP

Average diversification

The 3 months correlation between Aquestive and YXTCOM is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Aquestive Therapeutics and YXTCOM GROUP HOLDING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YXTCOM GROUP HOLDING 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 YXTCOM GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YXTCOM GROUP HOLDING has no effect on the direction of Aquestive Therapeutics i.e., Aquestive Therapeutics and YXTCOM GROUP go up and down completely randomly.

Pair Corralation between Aquestive Therapeutics and YXTCOM GROUP

Given the investment horizon of 90 days Aquestive Therapeutics is expected to under-perform the YXTCOM GROUP. But the stock apears to be less risky and, when comparing its historical volatility, Aquestive Therapeutics is 1.52 times less risky than YXTCOM GROUP. The stock trades about -0.4 of its potential returns per unit of risk. The YXTCOM GROUP HOLDING is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  259.00  in YXTCOM GROUP HOLDING on September 30, 2024 and sell it today you would earn a total of  2.00  from holding YXTCOM GROUP HOLDING or generate 0.77% return on investment over 90 days.

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

Aquestive Therapeutics  vs.  YXTCOM GROUP HOLDING

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.

YXTCOM GROUP HOLDING

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in YXTCOM GROUP HOLDING are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, YXTCOM GROUP unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aquestive Therapeutics and YXTCOM GROUP

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

The idea behind Aquestive Therapeutics and YXTCOM GROUP HOLDING 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.