Correlation Between Akanda Corp and United Fire
Can any of the company-specific risk be diversified away by investing in both Akanda Corp and United Fire 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 United Fire into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Akanda Corp and United Fire Group, you can compare the effects of market volatilities on Akanda Corp and United Fire 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 United Fire. Check out your portfolio center. Please also check ongoing floating volatility patterns of Akanda Corp and United Fire.
Diversification Opportunities for Akanda Corp and United Fire
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Akanda and United is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Akanda Corp and United Fire Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Fire 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 United Fire. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Fire Group has no effect on the direction of Akanda Corp i.e., Akanda Corp and United Fire go up and down completely randomly.
Pair Corralation between Akanda Corp and United Fire
Given the investment horizon of 90 days Akanda Corp is expected to under-perform the United Fire. In addition to that, Akanda Corp is 3.88 times more volatile than United Fire Group. It trades about -0.05 of its total potential returns per unit of risk. United Fire Group is currently generating about 0.03 per unit of volatility. If you would invest 2,504 in United Fire Group on September 3, 2024 and sell it today you would earn a total of 556.00 from holding United Fire Group or generate 22.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Akanda Corp vs. United Fire Group
Performance |
| Timeline |
| Akanda Corp |
| United Fire Group |
Akanda Corp and United Fire Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Akanda Corp and United Fire
The main advantage of trading using opposite Akanda Corp and United Fire positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Akanda Corp position performs unexpectedly, United Fire 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 United Fire will offset losses from the drop in United Fire's long position.| Akanda Corp vs. China SXT Pharmaceuticals | Akanda Corp vs. Petros Pharmaceuticals | Akanda Corp vs. GelStat Corp | Akanda Corp vs. Shuttle Pharmaceuticals |
| United Fire vs. Donegal Group B | United Fire vs. Horace Mann Educators | United Fire vs. Donegal Group A | United Fire vs. Global Indemnity PLC |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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