Correlation Between Akanda Corp and SBC Communications
Can any of the company-specific risk be diversified away by investing in both Akanda Corp and SBC Communications 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 SBC Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Akanda Corp and SBC Communications, you can compare the effects of market volatilities on Akanda Corp and SBC Communications 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 SBC Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Akanda Corp and SBC Communications.
Diversification Opportunities for Akanda Corp and SBC Communications
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Akanda and SBC is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Akanda Corp and SBC Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBC Communications 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 SBC Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SBC Communications has no effect on the direction of Akanda Corp i.e., Akanda Corp and SBC Communications go up and down completely randomly.
Pair Corralation between Akanda Corp and SBC Communications
Given the investment horizon of 90 days Akanda Corp is expected to generate 1.52 times more return on investment than SBC Communications. However, Akanda Corp is 1.52 times more volatile than SBC Communications. It trades about 0.05 of its potential returns per unit of risk. SBC Communications is currently generating about 0.01 per unit of risk. If you would invest 165.00 in Akanda Corp on November 28, 2024 and sell it today you would earn a total of 4.00 from holding Akanda Corp or generate 2.42% 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. SBC Communications
Performance |
| Timeline |
| Akanda Corp |
| SBC Communications |
Akanda Corp and SBC Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Akanda Corp and SBC Communications
The main advantage of trading using opposite Akanda Corp and SBC Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Akanda Corp position performs unexpectedly, SBC Communications 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 SBC Communications will offset losses from the drop in SBC Communications' 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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