Correlation Between Cronos and Procyon
Can any of the company-specific risk be diversified away by investing in both Cronos and Procyon 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 Procyon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cronos Group and Procyon, you can compare the effects of market volatilities on Cronos and Procyon 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 Procyon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cronos and Procyon.
Diversification Opportunities for Cronos and Procyon
Good diversification
The 3 months correlation between Cronos and Procyon is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Cronos Group and Procyon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Procyon 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 Procyon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Procyon has no effect on the direction of Cronos i.e., Cronos and Procyon go up and down completely randomly.
Pair Corralation between Cronos and Procyon
Given the investment horizon of 90 days Cronos Group is expected to generate 0.33 times more return on investment than Procyon. However, Cronos Group is 3.02 times less risky than Procyon. It trades about 0.06 of its potential returns per unit of risk. Procyon is currently generating about -0.01 per unit of risk. If you would invest 203.00 in Cronos Group on October 6, 2024 and sell it today you would earn a total of 4.00 from holding Cronos Group or generate 1.97% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Cronos Group vs. Procyon
Performance |
Timeline |
Cronos Group |
Procyon |
Cronos and Procyon Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Cronos and Procyon
The main advantage of trading using opposite Cronos and Procyon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cronos position performs unexpectedly, Procyon 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 Procyon will offset losses from the drop in Procyon's long position.Cronos vs. OrganiGram Holdings | Cronos vs. Aurora Cannabis | Cronos vs. SNDL Inc | Cronos vs. Canopy Growth Corp |
Procyon vs. Blueberries Medical Corp | Procyon vs. Speakeasy Cannabis Club | Procyon vs. City View Green | Procyon vs. Benchmark Botanics |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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