Correlation Between Cincinnati Financial and Akanda Corp
Can any of the company-specific risk be diversified away by investing in both Cincinnati Financial 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 Cincinnati Financial and Akanda Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cincinnati Financial and Akanda Corp, you can compare the effects of market volatilities on Cincinnati Financial 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 Cincinnati Financial with a short position of Akanda Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cincinnati Financial and Akanda Corp.
Diversification Opportunities for Cincinnati Financial and Akanda Corp
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Cincinnati and Akanda is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Cincinnati Financial and Akanda Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akanda Corp and Cincinnati Financial 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 Cincinnati Financial 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 Cincinnati Financial i.e., Cincinnati Financial and Akanda Corp go up and down completely randomly.
Pair Corralation between Cincinnati Financial and Akanda Corp
Given the investment horizon of 90 days Cincinnati Financial is expected to generate 1.71 times less return on investment than Akanda Corp. But when comparing it to its historical volatility, Cincinnati Financial is 2.91 times less risky than Akanda Corp. It trades about 0.35 of its potential returns per unit of risk. Akanda Corp is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 144.00 in Akanda Corp on September 1, 2024 and sell it today you would earn a total of 31.00 from holding Akanda Corp or generate 21.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cincinnati Financial vs. Akanda Corp
Performance |
| Timeline |
| Cincinnati Financial |
| Akanda Corp |
Cincinnati Financial and Akanda Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cincinnati Financial and Akanda Corp
The main advantage of trading using opposite Cincinnati Financial and Akanda Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cincinnati Financial 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.| Cincinnati Financial vs. Progressive Corp | Cincinnati Financial vs. The Travelers Companies | Cincinnati Financial vs. W R Berkley | Cincinnati Financial vs. Selective Insurance Group |
| 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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