Correlation Between CUMMINS and Akanda Corp
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By analyzing existing cross correlation between CUMMINS INC 4875 and Akanda Corp, you can compare the effects of market volatilities on CUMMINS 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 CUMMINS with a short position of Akanda Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of CUMMINS and Akanda Corp.
Diversification Opportunities for CUMMINS and Akanda Corp
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CUMMINS and Akanda is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding CUMMINS INC 4875 and Akanda Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akanda Corp and CUMMINS 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 CUMMINS INC 4875 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 CUMMINS i.e., CUMMINS and Akanda Corp go up and down completely randomly.
Pair Corralation between CUMMINS and Akanda Corp
Assuming the 90 days trading horizon CUMMINS is expected to generate 2.3 times less return on investment than Akanda Corp. But when comparing it to its historical volatility, CUMMINS INC 4875 is 2.23 times less risky than Akanda Corp. It trades about 0.11 of its potential returns per unit of risk. Akanda Corp is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 153.00 in Akanda Corp on August 31, 2024 and sell it today you would earn a total of 17.00 from holding Akanda Corp or generate 11.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 72.73% |
| Values | Daily Returns |
CUMMINS INC 4875 vs. Akanda Corp
Performance |
| Timeline |
| CUMMINS INC 4875 |
| Akanda Corp |
CUMMINS and Akanda Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CUMMINS and Akanda Corp
The main advantage of trading using opposite CUMMINS and Akanda Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CUMMINS 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 CUMMINS INC 4875 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. Bausch Health Companies | Akanda Corp vs. Haleon plc | Akanda Corp vs. Intracellular Th | Akanda Corp vs. Amphastar P |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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