Correlation Between Tilray and Akanda Corp
Can any of the company-specific risk be diversified away by investing in both Tilray 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 Tilray and Akanda Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tilray Inc and Akanda Corp, you can compare the effects of market volatilities on Tilray 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 Tilray with a short position of Akanda Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tilray and Akanda Corp.
Diversification Opportunities for Tilray and Akanda Corp
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Tilray and Akanda is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Tilray Inc and Akanda Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akanda Corp and Tilray 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 Tilray Inc 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 Tilray i.e., Tilray and Akanda Corp go up and down completely randomly.
Pair Corralation between Tilray and Akanda Corp
Given the investment horizon of 90 days Tilray Inc is expected to under-perform the Akanda Corp. But the stock apears to be less risky and, when comparing its historical volatility, Tilray Inc is 1.03 times less risky than Akanda Corp. The stock trades about -0.34 of its potential returns per unit of risk. The Akanda Corp is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 164.00 in Akanda Corp on November 5, 2024 and sell it today you would lose (3.00) from holding Akanda Corp or give up 1.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Tilray Inc vs. Akanda Corp
Performance |
| Timeline |
| Tilray Inc |
| Akanda Corp |
Tilray and Akanda Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tilray and Akanda Corp
The main advantage of trading using opposite Tilray and Akanda Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tilray 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 Tilray Inc 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. CytomX Therapeutics | Akanda Corp vs. Instil Bio | Akanda Corp vs. Spero Therapeutics | Akanda Corp vs. Assembly Biosciences |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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