Correlation Between Amgen and Akanda Corp
Can any of the company-specific risk be diversified away by investing in both Amgen and Akanda Corp 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 Amgen and Akanda Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amgen Inc and Akanda Corp, you can compare the effects of market volatilities on Amgen and Akanda Corp 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 Amgen with a short position of Akanda Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amgen and Akanda Corp.
Diversification Opportunities for Amgen and Akanda Corp
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Amgen and Akanda is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Amgen Inc and Akanda Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akanda Corp and Amgen 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 Amgen Inc are associated (or correlated) with Akanda Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akanda Corp has no effect on the direction of Amgen i.e., Amgen and Akanda Corp go up and down completely randomly.
Pair Corralation between Amgen and Akanda Corp
Given the investment horizon of 90 days Amgen Inc is expected to generate 0.29 times more return on investment than Akanda Corp. However, Amgen Inc is 3.43 times less risky than Akanda Corp. It trades about -0.03 of its potential returns per unit of risk. Akanda Corp is currently generating about -0.14 per unit of risk. If you would invest 30,287 in Amgen Inc on September 1, 2024 and sell it today you would lose (2,000) from holding Amgen Inc or give up 6.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amgen Inc vs. Akanda Corp
Performance |
| Timeline |
| Amgen Inc |
| Akanda Corp |
Amgen and Akanda Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amgen and Akanda Corp
The main advantage of trading using opposite Amgen and Akanda Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amgen position performs unexpectedly, Akanda Corp 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 Akanda Corp will offset losses from the drop in Akanda Corp's long position.| Amgen vs. Tff Pharmaceuticals | Amgen vs. Eliem Therapeutics | Amgen vs. Inhibrx | Amgen vs. Enliven Therapeutics |
| Akanda Corp vs. Tff Pharmaceuticals | Akanda Corp vs. Eliem Therapeutics | Akanda Corp vs. Inhibrx | Akanda Corp vs. Enliven Therapeutics |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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