Correlation Between NioCorp Developments and Akanda Corp
Can any of the company-specific risk be diversified away by investing in both NioCorp Developments 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 NioCorp Developments and Akanda Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NioCorp Developments Ltd and Akanda Corp, you can compare the effects of market volatilities on NioCorp Developments 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 NioCorp Developments with a short position of Akanda Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of NioCorp Developments and Akanda Corp.
Diversification Opportunities for NioCorp Developments and Akanda Corp
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NioCorp and Akanda is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding NioCorp Developments Ltd and Akanda Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akanda Corp and NioCorp Developments 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 NioCorp Developments Ltd 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 NioCorp Developments i.e., NioCorp Developments and Akanda Corp go up and down completely randomly.
Pair Corralation between NioCorp Developments and Akanda Corp
Allowing for the 90-day total investment horizon NioCorp Developments Ltd is expected to generate 3.94 times more return on investment than Akanda Corp. However, NioCorp Developments is 3.94 times more volatile than Akanda Corp. It trades about 0.04 of its potential returns per unit of risk. Akanda Corp is currently generating about -0.05 per unit of risk. If you would invest 80.00 in NioCorp Developments Ltd on September 1, 2024 and sell it today you would earn a total of 53.00 from holding NioCorp Developments Ltd or generate 66.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NioCorp Developments Ltd vs. Akanda Corp
Performance |
| Timeline |
| NioCorp Developments |
| Akanda Corp |
NioCorp Developments and Akanda Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NioCorp Developments and Akanda Corp
The main advantage of trading using opposite NioCorp Developments and Akanda Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NioCorp Developments 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.| NioCorp Developments vs. Paiute Oil Mining | NioCorp Developments vs. Marfrig Global Foods | NioCorp Developments vs. Emerson Radio | NioCorp Developments vs. Reservoir Media |
| 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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