Correlation Between Akanda Corp and Anheuser Busch
Can any of the company-specific risk be diversified away by investing in both Akanda Corp and Anheuser Busch 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 Anheuser Busch into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Akanda Corp and Anheuser Busch Inbev, you can compare the effects of market volatilities on Akanda Corp and Anheuser Busch 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 Anheuser Busch. Check out your portfolio center. Please also check ongoing floating volatility patterns of Akanda Corp and Anheuser Busch.
Diversification Opportunities for Akanda Corp and Anheuser Busch
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Akanda and Anheuser is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Akanda Corp and Anheuser Busch Inbev in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anheuser Busch Inbev 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 Anheuser Busch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anheuser Busch Inbev has no effect on the direction of Akanda Corp i.e., Akanda Corp and Anheuser Busch go up and down completely randomly.
Pair Corralation between Akanda Corp and Anheuser Busch
Given the investment horizon of 90 days Akanda Corp is expected to generate 3.81 times more return on investment than Anheuser Busch. However, Akanda Corp is 3.81 times more volatile than Anheuser Busch Inbev. It trades about 0.04 of its potential returns per unit of risk. Anheuser Busch Inbev is currently generating about -0.5 per unit of risk. If you would invest 170.00 in Akanda Corp on August 29, 2024 and sell it today you would earn a total of 4.00 from holding Akanda Corp or generate 2.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Akanda Corp vs. Anheuser Busch Inbev
Performance |
| Timeline |
| Akanda Corp |
| Anheuser Busch Inbev |
Akanda Corp and Anheuser Busch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Akanda Corp and Anheuser Busch
The main advantage of trading using opposite Akanda Corp and Anheuser Busch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Akanda Corp position performs unexpectedly, Anheuser Busch 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 Anheuser Busch will offset losses from the drop in Anheuser Busch's long position.| Akanda Corp vs. Phibro Animal Health | Akanda Corp vs. Procaps Group SA | Akanda Corp vs. Amphastar P | Akanda Corp vs. Alkermes Plc |
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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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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