Correlation Between Akerna Corp and Glory Star
Can any of the company-specific risk be diversified away by investing in both Akerna Corp and Glory Star 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 Akerna Corp and Glory Star into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Akerna Corp and Glory Star New, you can compare the effects of market volatilities on Akerna Corp and Glory Star 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 Akerna Corp with a short position of Glory Star. Check out your portfolio center. Please also check ongoing floating volatility patterns of Akerna Corp and Glory Star.
Diversification Opportunities for Akerna Corp and Glory Star
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Akerna and Glory is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Akerna Corp and Glory Star New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glory Star New and Akerna Corp 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 Akerna Corp are associated (or correlated) with Glory Star. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Glory Star New has no effect on the direction of Akerna Corp i.e., Akerna Corp and Glory Star go up and down completely randomly.
Pair Corralation between Akerna Corp and Glory Star
Assuming the 90 days horizon Akerna Corp is expected to generate 1.52 times less return on investment than Glory Star. But when comparing it to its historical volatility, Akerna Corp is 2.5 times less risky than Glory Star. It trades about 0.15 of its potential returns per unit of risk. Glory Star New is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 0.36 in Glory Star New on August 31, 2024 and sell it today you would lose (0.21) from holding Glory Star New or give up 58.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 33.17% |
| Values | Daily Returns |
Akerna Corp vs. Glory Star New
Performance |
| Timeline |
| Akerna Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Glory Star New |
Akerna Corp and Glory Star Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Akerna Corp and Glory Star
The main advantage of trading using opposite Akerna Corp and Glory Star positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Akerna Corp position performs unexpectedly, Glory Star 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 Glory Star will offset losses from the drop in Glory Star's long position.The idea behind Akerna Corp and Glory Star New pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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