Correlation Between Akanda Corp and Regencell Bioscience

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

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

Diversification Opportunities for Akanda Corp and Regencell Bioscience

-0.25

Correlation Coefficient

Akanda Corp  Regencell Bioscience

Very good diversification

The 3 months correlation between Akanda and Regencell is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Akanda Corp and Regencell Bioscience Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regencell Bioscience 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 Regencell Bioscience. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regencell Bioscience has no effect on the direction of Akanda Corp i.e., Akanda Corp and Regencell Bioscience go up and down completely randomly.

Pair Corralation between Akanda Corp and Regencell Bioscience

Given the investment horizon of 90 days Akanda Corp is expected to generate 1.28 times more return on investment than Regencell Bioscience. However, Akanda Corp is 1.28 times more volatile than Regencell Bioscience Holdings. It trades about 0.02 of its potential returns per unit of risk. Regencell Bioscience Holdings is currently generating about -0.22 per unit of risk. If you would invest  165.00  in Akanda Corp on October 10, 2024 and sell it today you would lose (2.00) from holding Akanda Corp or give up 1.21% of portfolio value over 90 days.

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

Akanda Corp  vs.  Regencell Bioscience 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 unsteady 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.

Regencell Bioscience

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Regencell Bioscience Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Akanda Corp and Regencell Bioscience

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

The idea behind Akanda Corp and Regencell Bioscience 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.