Correlation Between Design Therapeutics and Akanda Corp

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Can any of the company-specific risk be diversified away by investing in both Design Therapeutics 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 Design Therapeutics and Akanda Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Design Therapeutics and Akanda Corp, you can compare the effects of market volatilities on Design Therapeutics 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 Design Therapeutics with a short position of Akanda Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Design Therapeutics and Akanda Corp.

Diversification Opportunities for Design Therapeutics and Akanda Corp

-0.49
  Correlation Coefficient

Very good diversification

The 3 months correlation between Design and Akanda is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Design Therapeutics and Akanda Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akanda Corp and Design Therapeutics 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 Design Therapeutics 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 Design Therapeutics i.e., Design Therapeutics and Akanda Corp go up and down completely randomly.

Pair Corralation between Design Therapeutics and Akanda Corp

Given the investment horizon of 90 days Design Therapeutics is expected to generate 1.16 times more return on investment than Akanda Corp. However, Design Therapeutics is 1.16 times more volatile than Akanda Corp. It trades about 0.13 of its potential returns per unit of risk. Akanda Corp is currently generating about 0.06 per unit of risk. If you would invest  556.00  in Design Therapeutics on September 6, 2024 and sell it today you would earn a total of  83.00  from holding Design Therapeutics or generate 14.93% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Design Therapeutics  vs.  Akanda Corp

 Performance 
       Timeline  
Design Therapeutics 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Design Therapeutics are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting technical and fundamental indicators, Design Therapeutics displayed solid returns over the last few months and may actually be approaching a breakup point.
Akanda Corp 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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 January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Design Therapeutics and Akanda Corp Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Design Therapeutics and Akanda Corp

The main advantage of trading using opposite Design Therapeutics and Akanda Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Design Therapeutics 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 Design Therapeutics 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..

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