Correlation Between Cryomass Technologies and 1CM

Can any of the company-specific risk be diversified away by investing in both Cryomass Technologies and 1CM 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 Cryomass Technologies and 1CM into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cryomass Technologies and 1CM Inc, you can compare the effects of market volatilities on Cryomass Technologies and 1CM 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 Cryomass Technologies with a short position of 1CM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cryomass Technologies and 1CM.

Diversification Opportunities for Cryomass Technologies and 1CM

-0.16

Correlation Coefficient

Cryomass Technologies  1CM

Good diversification

The 3 months correlation between Cryomass and 1CM is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Cryomass Technologies and 1CM Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 1CM Inc and Cryomass Technologies 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 Cryomass Technologies are associated (or correlated) with 1CM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 1CM Inc has no effect on the direction of Cryomass Technologies i.e., Cryomass Technologies and 1CM go up and down completely randomly.

Pair Corralation between Cryomass Technologies and 1CM

Given the investment horizon of 90 days Cryomass Technologies is expected to generate 1.23 times less return on investment than 1CM. But when comparing it to its historical volatility, Cryomass Technologies is 2.2 times less risky than 1CM. It trades about 0.2 of its potential returns per unit of risk. 1CM Inc is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  18.00  in 1CM Inc on December 5, 2024 and sell it today you would earn a total of  13.00  from holding 1CM Inc or generate 72.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	93.75%
Values	Daily Returns

Cryomass Technologies  vs.  1CM Inc

Cryomass Technologies

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cryomass Technologies are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile basic indicators, Cryomass Technologies displayed solid returns over the last few months and may actually be approaching a breakup point.

1CM Inc

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in 1CM Inc are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating technical and fundamental indicators, 1CM reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cryomass Technologies and 1CM

The main advantage of trading using opposite Cryomass Technologies and 1CM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cryomass Technologies position performs unexpectedly, 1CM 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 1CM will offset losses from the drop in 1CM's long position.

The idea behind Cryomass Technologies and 1CM Inc 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.