Correlation Between Akanda Corp and Collegium Pharmaceutical
Can any of the company-specific risk be diversified away by investing in both Akanda Corp and Collegium Pharmaceutical 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 Collegium Pharmaceutical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Akanda Corp and Collegium Pharmaceutical, you can compare the effects of market volatilities on Akanda Corp and Collegium Pharmaceutical 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 Collegium Pharmaceutical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Akanda Corp and Collegium Pharmaceutical.
Diversification Opportunities for Akanda Corp and Collegium Pharmaceutical
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Akanda and Collegium is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Akanda Corp and Collegium Pharmaceutical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Collegium Pharmaceutical 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 Collegium Pharmaceutical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Collegium Pharmaceutical has no effect on the direction of Akanda Corp i.e., Akanda Corp and Collegium Pharmaceutical go up and down completely randomly.
Pair Corralation between Akanda Corp and Collegium Pharmaceutical
Given the investment horizon of 90 days Akanda Corp is expected to under-perform the Collegium Pharmaceutical. In addition to that, Akanda Corp is 1.91 times more volatile than Collegium Pharmaceutical. It trades about -0.2 of its total potential returns per unit of risk. Collegium Pharmaceutical is currently generating about -0.24 per unit of volatility. If you would invest 3,513 in Collegium Pharmaceutical on August 27, 2024 and sell it today you would lose (434.00) from holding Collegium Pharmaceutical or give up 12.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Akanda Corp vs. Collegium Pharmaceutical
Performance |
| Timeline |
| Akanda Corp |
| Collegium Pharmaceutical |
Akanda Corp and Collegium Pharmaceutical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Akanda Corp and Collegium Pharmaceutical
The main advantage of trading using opposite Akanda Corp and Collegium Pharmaceutical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Akanda Corp position performs unexpectedly, Collegium Pharmaceutical 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 Collegium Pharmaceutical will offset losses from the drop in Collegium Pharmaceutical's long position.| Akanda Corp vs. China SXT Pharmaceuticals | Akanda Corp vs. Petros Pharmaceuticals | Akanda Corp vs. GelStat Corp | Akanda Corp vs. Shuttle Pharmaceuticals |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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