Correlation Between Arrow Electronics and Akanda Corp
Can any of the company-specific risk be diversified away by investing in both Arrow Electronics 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 Arrow Electronics and Akanda Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arrow Electronics and Akanda Corp, you can compare the effects of market volatilities on Arrow Electronics 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 Arrow Electronics with a short position of Akanda Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arrow Electronics and Akanda Corp.
Diversification Opportunities for Arrow Electronics and Akanda Corp
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Arrow and Akanda is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Arrow Electronics and Akanda Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akanda Corp and Arrow Electronics 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 Arrow Electronics 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 Arrow Electronics i.e., Arrow Electronics and Akanda Corp go up and down completely randomly.
Pair Corralation between Arrow Electronics and Akanda Corp
Considering the 90-day investment horizon Arrow Electronics is expected to under-perform the Akanda Corp. But the stock apears to be less risky and, when comparing its historical volatility, Arrow Electronics is 1.77 times less risky than Akanda Corp. The stock trades about -0.16 of its potential returns per unit of risk. The Akanda Corp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 167.00 in Akanda Corp on August 30, 2024 and sell it today you would earn a total of 3.00 from holding Akanda Corp or generate 1.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arrow Electronics vs. Akanda Corp
Performance |
| Timeline |
| Arrow Electronics |
| Akanda Corp |
Arrow Electronics and Akanda Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arrow Electronics and Akanda Corp
The main advantage of trading using opposite Arrow Electronics and Akanda Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arrow Electronics 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.| Arrow Electronics vs. ScanSource | Arrow Electronics vs. ABIVAX Socit Anonyme | Arrow Electronics vs. Pinnacle Sherman Multi Strategy | Arrow Electronics vs. Morningstar Unconstrained Allocation |
| Akanda Corp vs. Phibro Animal Health | Akanda Corp vs. Procaps Group SA | Akanda Corp vs. Amphastar P | Akanda Corp vs. Alkermes 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |