Correlation Between Apple and Cronos
Can any of the company-specific risk be diversified away by investing in both Apple and Cronos 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 Apple and Cronos into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc CDR and Cronos Group, you can compare the effects of market volatilities on Apple and Cronos 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 Apple with a short position of Cronos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Cronos.
Diversification Opportunities for Apple and Cronos
Very good diversification
The 3 months correlation between Apple and Cronos is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc CDR and Cronos Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cronos Group and Apple 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 Apple Inc CDR are associated (or correlated) with Cronos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cronos Group has no effect on the direction of Apple i.e., Apple and Cronos go up and down completely randomly.
Pair Corralation between Apple and Cronos
Assuming the 90 days trading horizon Apple Inc CDR is expected to generate 0.46 times more return on investment than Cronos. However, Apple Inc CDR is 2.17 times less risky than Cronos. It trades about 0.5 of its potential returns per unit of risk. Cronos Group is currently generating about -0.16 per unit of risk. If you would invest 3,412 in Apple Inc CDR on September 24, 2024 and sell it today you would earn a total of 326.00 from holding Apple Inc CDR or generate 9.55% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 95.45% |
Values | Daily Returns |
Apple Inc CDR vs. Cronos Group
Performance |
Timeline |
Apple Inc CDR |
Cronos Group |
Apple and Cronos Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Apple and Cronos
The main advantage of trading using opposite Apple and Cronos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, Cronos 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 will offset losses from the drop in Cronos' long position.Apple vs. CNJ Capital Investments | Apple vs. Advent Wireless | Apple vs. Mako Mining Corp | Apple vs. Plaza Retail REIT |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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