Correlation Between Akanda Corp and Alkermes Plc
Can any of the company-specific risk be diversified away by investing in both Akanda Corp and Alkermes Plc 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 Akanda Corp and Alkermes Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Akanda Corp and Alkermes Plc, you can compare the effects of market volatilities on Akanda Corp and Alkermes Plc 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 Akanda Corp with a short position of Alkermes Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Akanda Corp and Alkermes Plc.
Diversification Opportunities for Akanda Corp and Alkermes Plc
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Akanda and Alkermes is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Akanda Corp and Alkermes Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alkermes Plc and Akanda Corp 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 Akanda Corp are associated (or correlated) with Alkermes Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alkermes Plc has no effect on the direction of Akanda Corp i.e., Akanda Corp and Alkermes Plc go up and down completely randomly.
Pair Corralation between Akanda Corp and Alkermes Plc
Given the investment horizon of 90 days Akanda Corp is expected to under-perform the Alkermes Plc. In addition to that, Akanda Corp is 3.92 times more volatile than Alkermes Plc. It trades about -0.06 of its total potential returns per unit of risk. Alkermes Plc is currently generating about 0.0 per unit of volatility. If you would invest 3,154 in Alkermes Plc on August 31, 2024 and sell it today you would lose (252.00) from holding Alkermes Plc or give up 7.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Akanda Corp vs. Alkermes Plc
Performance |
| Timeline |
| Akanda Corp |
| Alkermes Plc |
Akanda Corp and Alkermes Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Akanda Corp and Alkermes Plc
The main advantage of trading using opposite Akanda Corp and Alkermes Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Akanda Corp position performs unexpectedly, Alkermes Plc 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 Alkermes Plc will offset losses from the drop in Alkermes Plc's long position.The idea behind Akanda Corp and Alkermes Plc 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.| Alkermes Plc vs. Intracellular Th | Alkermes Plc vs. Ironwood Pharmaceuticals | Alkermes Plc vs. Pacira BioSciences, | Alkermes Plc vs. ANI Pharmaceuticals |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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