Correlation Between CSIF III and Cronos Immo

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

By analyzing existing cross correlation between CSIF III Eq and Cronos Immo Fund, you can compare the effects of market volatilities on CSIF III and Cronos Immo 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 CSIF III with a short position of Cronos Immo. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSIF III and Cronos Immo.

Diversification Opportunities for CSIF III and Cronos Immo

0.7

Correlation Coefficient

CSIF III  Cronos Immo

Poor diversification

The 3 months correlation between CSIF and Cronos is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding CSIF III Eq and Cronos Immo Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cronos Immo Fund and CSIF III 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 CSIF III Eq are associated (or correlated) with Cronos Immo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cronos Immo Fund has no effect on the direction of CSIF III i.e., CSIF III and Cronos Immo go up and down completely randomly.

Pair Corralation between CSIF III and Cronos Immo

Assuming the 90 days trading horizon CSIF III Eq is expected to generate 0.9 times more return on investment than Cronos Immo. However, CSIF III Eq is 1.11 times less risky than Cronos Immo. It trades about 0.1 of its potential returns per unit of risk. Cronos Immo Fund is currently generating about 0.02 per unit of risk. If you would invest  122,632  in CSIF III Eq on September 28, 2024 and sell it today you would earn a total of  47,847  from holding CSIF III Eq or generate 39.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.59%
Values	Daily Returns

CSIF III Eq  vs.  Cronos Immo Fund

CSIF III Eq

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CSIF III Eq are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of rather sound technical and fundamental indicators, CSIF III is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Cronos Immo Fund

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cronos Immo Fund are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly sluggish technical and fundamental indicators, Cronos Immo may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with CSIF III and Cronos Immo

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

The idea behind CSIF III Eq and Cronos Immo Fund 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.