Correlation Between Akanda Corp and IPG Photonics
Can any of the company-specific risk be diversified away by investing in both Akanda Corp and IPG Photonics 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 IPG Photonics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Akanda Corp and IPG Photonics, you can compare the effects of market volatilities on Akanda Corp and IPG Photonics 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 IPG Photonics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Akanda Corp and IPG Photonics.
Diversification Opportunities for Akanda Corp and IPG Photonics
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Akanda and IPG is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Akanda Corp and IPG Photonics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IPG Photonics 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 IPG Photonics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IPG Photonics has no effect on the direction of Akanda Corp i.e., Akanda Corp and IPG Photonics go up and down completely randomly.
Pair Corralation between Akanda Corp and IPG Photonics
Given the investment horizon of 90 days Akanda Corp is expected to under-perform the IPG Photonics. In addition to that, Akanda Corp is 4.43 times more volatile than IPG Photonics. It trades about -0.08 of its total potential returns per unit of risk. IPG Photonics is currently generating about -0.03 per unit of volatility. If you would invest 10,000 in IPG Photonics on September 2, 2024 and sell it today you would lose (2,196) from holding IPG Photonics or give up 21.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Akanda Corp vs. IPG Photonics
Performance |
| Timeline |
| Akanda Corp |
| IPG Photonics |
Akanda Corp and IPG Photonics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Akanda Corp and IPG Photonics
The main advantage of trading using opposite Akanda Corp and IPG Photonics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Akanda Corp position performs unexpectedly, IPG Photonics 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 IPG Photonics will offset losses from the drop in IPG Photonics' 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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