Correlation Between Acreage Holdings and Kaya Holdings

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

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

Diversification Opportunities for Acreage Holdings and Kaya Holdings

0.62

Correlation Coefficient

Acreage Holdings  Kaya Holdings

Poor diversification

The 3 months correlation between Acreage and Kaya is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Acreage Holdings and Kaya Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaya Holdings and Acreage Holdings 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 Acreage Holdings are associated (or correlated) with Kaya Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kaya Holdings has no effect on the direction of Acreage Holdings i.e., Acreage Holdings and Kaya Holdings go up and down completely randomly.

Pair Corralation between Acreage Holdings and Kaya Holdings

Assuming the 90 days horizon Acreage Holdings is expected to under-perform the Kaya Holdings. In addition to that, Acreage Holdings is 1.7 times more volatile than Kaya Holdings. It trades about -0.14 of its total potential returns per unit of risk. Kaya Holdings is currently generating about 0.03 per unit of volatility. If you would invest  4.16  in Kaya Holdings on September 3, 2024 and sell it today you would lose (0.36) from holding Kaya Holdings or give up 8.65% of portfolio value over 90 days.

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

Acreage Holdings  vs.  Kaya Holdings

Acreage Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Acreage Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's technical indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Kaya Holdings

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Kaya Holdings are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Kaya Holdings unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Acreage Holdings and Kaya Holdings

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

The idea behind Acreage Holdings and Kaya 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.