Correlation Between Akanda Corp and Arm Holdings
Can any of the company-specific risk be diversified away by investing in both Akanda Corp and Arm Holdings 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 Arm Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Akanda Corp and Arm Holdings plc, you can compare the effects of market volatilities on Akanda Corp and Arm Holdings 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 Arm Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Akanda Corp and Arm Holdings.
Diversification Opportunities for Akanda Corp and Arm Holdings
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Akanda and Arm is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Akanda Corp and Arm Holdings plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arm Holdings 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 Arm Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arm Holdings plc has no effect on the direction of Akanda Corp i.e., Akanda Corp and Arm Holdings go up and down completely randomly.
Pair Corralation between Akanda Corp and Arm Holdings
Given the investment horizon of 90 days Akanda Corp is expected to under-perform the Arm Holdings. In addition to that, Akanda Corp is 1.19 times more volatile than Arm Holdings plc. It trades about -0.23 of its total potential returns per unit of risk. Arm Holdings plc is currently generating about 0.01 per unit of volatility. If you would invest 13,563 in Arm Holdings plc on August 23, 2024 and sell it today you would lose (249.00) from holding Arm Holdings plc or give up 1.84% 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. Arm Holdings plc
Performance |
| Timeline |
| Akanda Corp |
| Arm Holdings plc |
Akanda Corp and Arm Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Akanda Corp and Arm Holdings
The main advantage of trading using opposite Akanda Corp and Arm Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Akanda Corp position performs unexpectedly, Arm Holdings 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 Arm Holdings will offset losses from the drop in Arm Holdings' long position.| Akanda Corp vs. China SXT Pharmaceuticals | Akanda Corp vs. Petros Pharmaceuticals | Akanda Corp vs. GelStat Corp | Akanda Corp vs. Shuttle Pharmaceuticals |
| Arm Holdings vs. SunLink Health Systems | Arm Holdings vs. Paysafe | Arm Holdings vs. enVVeno Medical Corp | Arm Holdings vs. Akanda Corp |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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