Correlation Between Akanda Corp and BioNTech

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

By analyzing existing cross correlation between Akanda Corp and BioNTech SE, you can compare the effects of market volatilities on Akanda Corp and BioNTech 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 BioNTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Akanda Corp and BioNTech.

Diversification Opportunities for Akanda Corp and BioNTech

0.24

Correlation Coefficient

Akanda Corp  BioNTech

Modest diversification

The 3 months correlation between Akanda and BioNTech is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Akanda Corp and BioNTech SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioNTech SE 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 BioNTech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BioNTech SE has no effect on the direction of Akanda Corp i.e., Akanda Corp and BioNTech go up and down completely randomly.

Pair Corralation between Akanda Corp and BioNTech

Given the investment horizon of 90 days Akanda Corp is expected to generate 1.15 times more return on investment than BioNTech. However, Akanda Corp is 1.15 times more volatile than BioNTech SE. It trades about 0.02 of its potential returns per unit of risk. BioNTech SE is currently generating about -0.05 per unit of risk. If you would invest  164.00  in Akanda Corp on December 5, 2024 and sell it today you would earn a total of  0.00  from holding Akanda Corp or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	97.5%
Values	Daily Returns

Akanda Corp  vs.  BioNTech SE

Akanda Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Akanda Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, Akanda Corp may actually be approaching a critical reversion point that can send shares even higher in April 2025.

BioNTech SE

Risk-Adjusted Performance

Very Weak

Over the last 90 days BioNTech SE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, BioNTech is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Akanda Corp and BioNTech

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

The idea behind Akanda Corp and BioNTech SE 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.