Correlation Between Estee Lauder and Akanda Corp
Can any of the company-specific risk be diversified away by investing in both Estee Lauder 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 Estee Lauder and Akanda Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Estee Lauder Companies and Akanda Corp, you can compare the effects of market volatilities on Estee Lauder 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 Estee Lauder with a short position of Akanda Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Estee Lauder and Akanda Corp.
Diversification Opportunities for Estee Lauder and Akanda Corp
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Estee and Akanda is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Estee Lauder Companies and Akanda Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akanda Corp and Estee Lauder 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 Estee Lauder Companies 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 Estee Lauder i.e., Estee Lauder and Akanda Corp go up and down completely randomly.
Pair Corralation between Estee Lauder and Akanda Corp
Allowing for the 90-day total investment horizon Estee Lauder Companies is expected to generate 0.28 times more return on investment than Akanda Corp. However, Estee Lauder Companies is 3.52 times less risky than Akanda Corp. It trades about -0.06 of its potential returns per unit of risk. Akanda Corp is currently generating about -0.07 per unit of risk. If you would invest 13,082 in Estee Lauder Companies on September 3, 2024 and sell it today you would lose (5,484) from holding Estee Lauder Companies or give up 41.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Estee Lauder Companies vs. Akanda Corp
Performance |
| Timeline |
| Estee Lauder Companies |
| Akanda Corp |
Estee Lauder and Akanda Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Estee Lauder and Akanda Corp
The main advantage of trading using opposite Estee Lauder and Akanda Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Estee Lauder 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.| Estee Lauder vs. Honest Company | Estee Lauder vs. Hims Hers Health | Estee Lauder vs. Procter Gamble | Estee Lauder vs. Coty Inc |
| Akanda Corp vs. China SXT Pharmaceuticals | Akanda Corp vs. Petros Pharmaceuticals | Akanda Corp vs. GelStat Corp | Akanda Corp vs. Shuttle Pharmaceuticals |
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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