Correlation Between Akanda Corp and Celsius Holdings

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

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

Diversification Opportunities for Akanda Corp and Celsius Holdings

0.67

Correlation Coefficient

Akanda Corp  Celsius Holdings

Poor diversification

The 3 months correlation between Akanda and Celsius is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Akanda Corp and Celsius Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Celsius Holdings 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 Celsius Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Celsius Holdings has no effect on the direction of Akanda Corp i.e., Akanda Corp and Celsius Holdings go up and down completely randomly.

Pair Corralation between Akanda Corp and Celsius Holdings

Given the investment horizon of 90 days Akanda Corp is expected to generate 3.18 times less return on investment than Celsius Holdings. In addition to that, Akanda Corp is 1.51 times more volatile than Celsius Holdings. It trades about 0.06 of its total potential returns per unit of risk. Celsius Holdings is currently generating about 0.3 per unit of volatility. If you would invest  2,579  in Celsius Holdings on September 17, 2024 and sell it today you would earn a total of  600.00  from holding Celsius Holdings or generate 23.26% return on investment over 90 days.

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

Akanda Corp  vs.  Celsius Holdings

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 inconsistent performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Celsius Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Celsius Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong essential indicators, Celsius Holdings is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Akanda Corp and Celsius Holdings

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

The idea behind Akanda Corp and Celsius Holdings 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.

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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.