Correlation Between Cronos and Choom Holdings

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

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

Diversification Opportunities for Cronos and Choom Holdings

0.0

Correlation Coefficient

Cronos  Choom Holdings

Pay attention - limited upside

The 3 months correlation between Cronos and Choom is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Cronos Group and Choom Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Choom Holdings and Cronos 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 Cronos Group are associated (or correlated) with Choom Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Choom Holdings has no effect on the direction of Cronos i.e., Cronos and Choom Holdings go up and down completely randomly.

Pair Corralation between Cronos and Choom Holdings

If you would invest  0.00  in Choom Holdings on October 21, 2024 and sell it today you would earn a total of  0.00  from holding Choom Holdings or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Cronos Group  vs.  Choom Holdings

Cronos Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cronos Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Cronos is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Choom Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Choom Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Choom Holdings is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Cronos and Choom Holdings

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

The idea behind Cronos Group and Choom 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.