Correlation Between Akanda Corp and LATAM Airlines
Can any of the company-specific risk be diversified away by investing in both Akanda Corp and LATAM Airlines 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 LATAM Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Akanda Corp and LATAM Airlines Group, you can compare the effects of market volatilities on Akanda Corp and LATAM Airlines 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 LATAM Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Akanda Corp and LATAM Airlines.
Diversification Opportunities for Akanda Corp and LATAM Airlines
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Akanda and LATAM is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Akanda Corp and LATAM Airlines Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LATAM Airlines Group 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 LATAM Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LATAM Airlines Group has no effect on the direction of Akanda Corp i.e., Akanda Corp and LATAM Airlines go up and down completely randomly.
Pair Corralation between Akanda Corp and LATAM Airlines
Given the investment horizon of 90 days Akanda Corp is expected to under-perform the LATAM Airlines. In addition to that, Akanda Corp is 6.22 times more volatile than LATAM Airlines Group. It trades about -0.05 of its total potential returns per unit of risk. LATAM Airlines Group is currently generating about 0.1 per unit of volatility. If you would invest 2,470 in LATAM Airlines Group on September 14, 2024 and sell it today you would earn a total of 383.00 from holding LATAM Airlines Group or generate 15.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 20.0% |
| Values | Daily Returns |
Akanda Corp vs. LATAM Airlines Group
Performance |
| Timeline |
| Akanda Corp |
| LATAM Airlines Group |
Akanda Corp and LATAM Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Akanda Corp and LATAM Airlines
The main advantage of trading using opposite Akanda Corp and LATAM Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Akanda Corp position performs unexpectedly, LATAM Airlines 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 LATAM Airlines will offset losses from the drop in LATAM Airlines' long position.| Akanda Corp vs. Puma Biotechnology | Akanda Corp vs. Iovance Biotherapeutics | Akanda Corp vs. Day One Biopharmaceuticals | Akanda Corp vs. Inozyme Pharma |
| LATAM Airlines vs. Reservoir Media | LATAM Airlines vs. Akanda Corp | LATAM Airlines vs. NuRAN Wireless | LATAM Airlines vs. Sonida Senior Living |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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