Correlation Between GelStat Corp and Akanda Corp

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

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

Diversification Opportunities for GelStat Corp and Akanda Corp

0.01

Correlation Coefficient

GelStat Corp  Akanda Corp

Significant diversification

The 3 months correlation between GelStat and Akanda is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding GelStat Corp and Akanda Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akanda Corp and GelStat 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 GelStat Corp 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 GelStat Corp i.e., GelStat Corp and Akanda Corp go up and down completely randomly.

Pair Corralation between GelStat Corp and Akanda Corp

Given the investment horizon of 90 days GelStat Corp is expected to under-perform the Akanda Corp. In addition to that, GelStat Corp is 3.19 times more volatile than Akanda Corp. It trades about -0.07 of its total potential returns per unit of risk. Akanda Corp is currently generating about 0.12 per unit of volatility. If you would invest  157.00  in Akanda Corp on December 1, 2024 and sell it today you would earn a total of  12.00  from holding Akanda Corp or generate 7.64% return on investment over 90 days.

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

GelStat Corp  vs.  Akanda Corp

GelStat Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days GelStat Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Akanda Corp

Risk-Adjusted Performance

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 very healthy basic indicators, Akanda Corp is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with GelStat Corp and Akanda Corp

The main advantage of trading using opposite GelStat Corp and Akanda Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GelStat Corp 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 GelStat Corp 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.

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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.