Correlation Between Akanda Corp and Azure Holding

Can any of the company-specific risk be diversified away by investing in both Akanda Corp and Azure Holding 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 Akanda Corp and Azure Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Akanda Corp and Azure Holding Group, you can compare the effects of market volatilities on Akanda Corp and Azure Holding 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 Akanda Corp with a short position of Azure Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Akanda Corp and Azure Holding.

Diversification Opportunities for Akanda Corp and Azure Holding

0.43

Correlation Coefficient

Akanda Corp  Azure Holding

Very weak diversification

The 3 months correlation between Akanda and Azure is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Akanda Corp and Azure Holding Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Azure Holding Group and Akanda 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 Akanda Corp are associated (or correlated) with Azure Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Azure Holding Group has no effect on the direction of Akanda Corp i.e., Akanda Corp and Azure Holding go up and down completely randomly.

Pair Corralation between Akanda Corp and Azure Holding

Given the investment horizon of 90 days Akanda Corp is expected to generate 0.39 times more return on investment than Azure Holding. However, Akanda Corp is 2.59 times less risky than Azure Holding. It trades about 0.04 of its potential returns per unit of risk. Azure Holding Group is currently generating about 0.0 per unit of risk. If you would invest  165.00  in Akanda Corp on October 8, 2024 and sell it today you would earn a total of  2.00  from holding Akanda Corp or generate 1.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Akanda Corp  vs.  Azure Holding Group

Akanda Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Akanda Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Azure Holding Group

Risk-Adjusted Performance

7 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Azure Holding Group are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Azure Holding demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Akanda Corp and Azure Holding

The main advantage of trading using opposite Akanda Corp and Azure Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Akanda Corp position performs unexpectedly, Azure Holding 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 Azure Holding will offset losses from the drop in Azure Holding's long position.

The idea behind Akanda Corp and Azure Holding Group 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.