Correlation Between Akari Therapeutics and Aurora Cannabis
Can any of the company-specific risk be diversified away by investing in both Akari Therapeutics and Aurora Cannabis 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 Akari Therapeutics and Aurora Cannabis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Akari Therapeutics PLC and Aurora Cannabis, you can compare the effects of market volatilities on Akari Therapeutics and Aurora Cannabis 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 Akari Therapeutics with a short position of Aurora Cannabis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Akari Therapeutics and Aurora Cannabis.
Diversification Opportunities for Akari Therapeutics and Aurora Cannabis
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Akari and Aurora is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Akari Therapeutics PLC and Aurora Cannabis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurora Cannabis and Akari Therapeutics 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 Akari Therapeutics PLC are associated (or correlated) with Aurora Cannabis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurora Cannabis has no effect on the direction of Akari Therapeutics i.e., Akari Therapeutics and Aurora Cannabis go up and down completely randomly.
Pair Corralation between Akari Therapeutics and Aurora Cannabis
Given the investment horizon of 90 days Akari Therapeutics PLC is expected to under-perform the Aurora Cannabis. But the stock apears to be less risky and, when comparing its historical volatility, Akari Therapeutics PLC is 1.18 times less risky than Aurora Cannabis. The stock trades about -0.03 of its potential returns per unit of risk. The Aurora Cannabis is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 551.00 in Aurora Cannabis on August 26, 2024 and sell it today you would lose (117.00) from holding Aurora Cannabis or give up 21.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.7% |
| Values | Daily Returns |
Akari Therapeutics PLC vs. Aurora Cannabis
Performance |
| Timeline |
| Akari Therapeutics PLC |
| Aurora Cannabis |
Akari Therapeutics and Aurora Cannabis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Akari Therapeutics and Aurora Cannabis
The main advantage of trading using opposite Akari Therapeutics and Aurora Cannabis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Akari Therapeutics position performs unexpectedly, Aurora Cannabis 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 Aurora Cannabis will offset losses from the drop in Aurora Cannabis' long position.| Akari Therapeutics vs. Armata Pharmaceuticals | Akari Therapeutics vs. Anebulo Pharmaceuticals | Akari Therapeutics vs. Processa Pharmaceuticals | Akari Therapeutics vs. Salarius Pharmaceuticals |
| Aurora Cannabis vs. Capricor Therapeutics | Aurora Cannabis vs. Akari Therapeutics PLC | Aurora Cannabis vs. Soleno Therapeutics | Aurora Cannabis vs. Bio Path Holdings |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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