Correlation Between Akanda Corp and CbdMD
Can any of the company-specific risk be diversified away by investing in both Akanda Corp and CbdMD 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 CbdMD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Akanda Corp and cbdMD Inc, you can compare the effects of market volatilities on Akanda Corp and CbdMD 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 CbdMD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Akanda Corp and CbdMD.
Diversification Opportunities for Akanda Corp and CbdMD
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Akanda and CbdMD is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Akanda Corp and cbdMD Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on cbdMD Inc 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 CbdMD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of cbdMD Inc has no effect on the direction of Akanda Corp i.e., Akanda Corp and CbdMD go up and down completely randomly.
Pair Corralation between Akanda Corp and CbdMD
Given the investment horizon of 90 days Akanda Corp is expected to under-perform the CbdMD. But the stock apears to be less risky and, when comparing its historical volatility, Akanda Corp is 1.13 times less risky than CbdMD. The stock trades about -0.31 of its potential returns per unit of risk. The cbdMD Inc is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest 53.00 in cbdMD Inc on August 24, 2024 and sell it today you would lose (7.00) from holding cbdMD Inc or give up 13.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Akanda Corp vs. cbdMD Inc
Performance |
| Timeline |
| Akanda Corp |
| cbdMD Inc |
Akanda Corp and CbdMD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Akanda Corp and CbdMD
The main advantage of trading using opposite Akanda Corp and CbdMD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Akanda Corp position performs unexpectedly, CbdMD 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 CbdMD will offset losses from the drop in CbdMD's long position.| Akanda Corp vs. China SXT Pharmaceuticals | Akanda Corp vs. Petros Pharmaceuticals | Akanda Corp vs. GelStat Corp | Akanda Corp vs. Shuttle Pharmaceuticals |
| CbdMD vs. CV Sciences | CbdMD vs. Trulieve Cannabis Corp | CbdMD vs. Curaleaf Holdings | CbdMD vs. Green Thumb Industries |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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