Correlation Between Akanda Corp and Fevertree Drinks
Can any of the company-specific risk be diversified away by investing in both Akanda Corp and Fevertree Drinks 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 Fevertree Drinks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Akanda Corp and Fevertree Drinks Plc, you can compare the effects of market volatilities on Akanda Corp and Fevertree Drinks 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 Fevertree Drinks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Akanda Corp and Fevertree Drinks.
Diversification Opportunities for Akanda Corp and Fevertree Drinks
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Akanda and Fevertree is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Akanda Corp and Fevertree Drinks Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fevertree Drinks 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 Fevertree Drinks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fevertree Drinks Plc has no effect on the direction of Akanda Corp i.e., Akanda Corp and Fevertree Drinks go up and down completely randomly.
Pair Corralation between Akanda Corp and Fevertree Drinks
Given the investment horizon of 90 days Akanda Corp is expected to generate 1.96 times less return on investment than Fevertree Drinks. But when comparing it to its historical volatility, Akanda Corp is 1.22 times less risky than Fevertree Drinks. It trades about 0.09 of its potential returns per unit of risk. Fevertree Drinks Plc is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 802.00 in Fevertree Drinks Plc on November 27, 2024 and sell it today you would earn a total of 109.00 from holding Fevertree Drinks Plc or generate 13.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Akanda Corp vs. Fevertree Drinks Plc
Performance |
| Timeline |
| Akanda Corp |
| Fevertree Drinks Plc |
Akanda Corp and Fevertree Drinks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Akanda Corp and Fevertree Drinks
The main advantage of trading using opposite Akanda Corp and Fevertree Drinks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Akanda Corp position performs unexpectedly, Fevertree Drinks 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 Fevertree Drinks will offset losses from the drop in Fevertree Drinks' long position.| Akanda Corp vs. China SXT Pharmaceuticals | Akanda Corp vs. Petros Pharmaceuticals | Akanda Corp vs. GelStat Corp | Akanda Corp vs. Shuttle Pharmaceuticals |
| Fevertree Drinks vs. National Beverage Corp | Fevertree Drinks vs. Celsius Holdings | Fevertree Drinks vs. Monster Beverage Corp | Fevertree Drinks vs. Coca Cola Femsa SAB |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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