Correlation Between Procaps Group and Akanda Corp

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

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

Diversification Opportunities for Procaps Group and Akanda Corp

0.14

Correlation Coefficient

Procaps Group  Akanda Corp

Average diversification

The 3 months correlation between Procaps and Akanda is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Procaps Group SA and Akanda Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akanda Corp and Procaps Group 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 Procaps Group SA 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 Procaps Group i.e., Procaps Group and Akanda Corp go up and down completely randomly.

Pair Corralation between Procaps Group and Akanda Corp

Given the investment horizon of 90 days Procaps Group SA is expected to generate 3.85 times more return on investment than Akanda Corp. However, Procaps Group is 3.85 times more volatile than Akanda Corp. It trades about 0.12 of its potential returns per unit of risk. Akanda Corp is currently generating about 0.05 per unit of risk. If you would invest  170.00  in Procaps Group SA on October 7, 2024 and sell it today you would earn a total of  55.00  from holding Procaps Group SA or generate 32.35% return on investment over 90 days.

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

Procaps Group SA  vs.  Akanda Corp

Procaps Group SA

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Procaps Group SA are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Procaps Group exhibited solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with Procaps Group and Akanda Corp

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

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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.