Correlation Between Northstar Clean and Aquestive Therapeutics
Can any of the company-specific risk be diversified away by investing in both Northstar Clean 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 Northstar Clean and Aquestive Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Northstar Clean Technologies and Aquestive Therapeutics, you can compare the effects of market volatilities on Northstar Clean 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 Northstar Clean with a short position of Aquestive Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northstar Clean and Aquestive Therapeutics.
Diversification Opportunities for Northstar Clean and Aquestive Therapeutics
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Northstar and Aquestive is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Northstar Clean Technologies and Aquestive Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aquestive Therapeutics and Northstar Clean 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 Northstar Clean Technologies 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 Northstar Clean i.e., Northstar Clean and Aquestive Therapeutics go up and down completely randomly.
Pair Corralation between Northstar Clean and Aquestive Therapeutics
Assuming the 90 days horizon Northstar Clean Technologies is expected to generate 0.95 times more return on investment than Aquestive Therapeutics. However, Northstar Clean Technologies is 1.05 times less risky than Aquestive Therapeutics. It trades about 0.21 of its potential returns per unit of risk. Aquestive Therapeutics is currently generating about -0.1 per unit of risk. If you would invest 15.00 in Northstar Clean Technologies on September 24, 2024 and sell it today you would earn a total of 9.00 from holding Northstar Clean Technologies or generate 60.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Northstar Clean Technologies vs. Aquestive Therapeutics
Performance |
Timeline |
Northstar Clean Tech |
Aquestive Therapeutics |
Northstar Clean and Aquestive Therapeutics Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Northstar Clean and Aquestive Therapeutics
The main advantage of trading using opposite Northstar Clean and Aquestive Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northstar Clean 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.Northstar Clean vs. Susglobal Energy Corp | Northstar Clean vs. LanzaTech Global | Northstar Clean vs. Aqua Metals | Northstar Clean vs. LiCycle Holdings Corp |
Aquestive Therapeutics vs. Evoke Pharma | Aquestive Therapeutics vs. Dynavax Technologies | Aquestive Therapeutics vs. Amphastar P | Aquestive Therapeutics vs. Lantheus Holdings |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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