Correlation Between Neogen and Akanda Corp
Can any of the company-specific risk be diversified away by investing in both Neogen 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 Neogen and Akanda Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Neogen and Akanda Corp, you can compare the effects of market volatilities on Neogen 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 Neogen with a short position of Akanda Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Neogen and Akanda Corp.
Diversification Opportunities for Neogen and Akanda Corp
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Neogen and Akanda is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Neogen and Akanda Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akanda Corp and Neogen 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 Neogen 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 Neogen i.e., Neogen and Akanda Corp go up and down completely randomly.
Pair Corralation between Neogen and Akanda Corp
Given the investment horizon of 90 days Neogen is expected to generate 0.57 times more return on investment than Akanda Corp. However, Neogen is 1.76 times less risky than Akanda Corp. It trades about 0.03 of its potential returns per unit of risk. Akanda Corp is currently generating about -0.01 per unit of risk. If you would invest 1,405 in Neogen on August 28, 2024 and sell it today you would earn a total of 12.00 from holding Neogen or generate 0.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Neogen vs. Akanda Corp
Performance |
| Timeline |
| Neogen |
| Akanda Corp |
Neogen and Akanda Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Neogen and Akanda Corp
The main advantage of trading using opposite Neogen and Akanda Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Neogen 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.The idea behind Neogen and Akanda Corp 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.| 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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