Correlation Between Curaleaf Holdings and Aquestive Therapeutics

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

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

Diversification Opportunities for Curaleaf Holdings and Aquestive Therapeutics

0.61

Correlation Coefficient

Curaleaf Holdings  Aquestive Therapeutics

Poor diversification

The 3 months correlation between Curaleaf and Aquestive is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Curaleaf Holdings and Aquestive Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aquestive Therapeutics and Curaleaf Holdings 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 Curaleaf Holdings are associated (or correlated) with Aquestive Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aquestive Therapeutics has no effect on the direction of Curaleaf Holdings i.e., Curaleaf Holdings and Aquestive Therapeutics go up and down completely randomly.

Pair Corralation between Curaleaf Holdings and Aquestive Therapeutics

Assuming the 90 days horizon Curaleaf Holdings is expected to under-perform the Aquestive Therapeutics. In addition to that, Curaleaf Holdings is 1.66 times more volatile than Aquestive Therapeutics. It trades about -0.08 of its total potential returns per unit of risk. Aquestive Therapeutics is currently generating about -0.05 per unit of volatility. If you would invest  455.00  in Aquestive Therapeutics on September 12, 2024 and sell it today you would lose (73.00) from holding Aquestive Therapeutics or give up 16.04% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Curaleaf Holdings  vs.  Aquestive Therapeutics

Curaleaf Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Curaleaf Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's essential indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

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 latest conflicting performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Curaleaf Holdings and Aquestive Therapeutics

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

The idea behind Curaleaf Holdings and Aquestive Therapeutics 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.