Correlation Between Canoe EIT and Cronos
Can any of the company-specific risk be diversified away by investing in both Canoe EIT 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 Canoe EIT and Cronos into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canoe EIT Income and Cronos Group, you can compare the effects of market volatilities on Canoe EIT 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 Canoe EIT with a short position of Cronos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canoe EIT and Cronos.
Diversification Opportunities for Canoe EIT and Cronos
Excellent diversification
The 3 months correlation between Canoe and Cronos is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Canoe EIT Income and Cronos Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cronos Group and Canoe EIT 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 Canoe EIT Income 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 Canoe EIT i.e., Canoe EIT and Cronos go up and down completely randomly.
Pair Corralation between Canoe EIT and Cronos
Assuming the 90 days trading horizon Canoe EIT Income is expected to under-perform the Cronos. But the stock apears to be less risky and, when comparing its historical volatility, Canoe EIT Income is 2.78 times less risky than Cronos. The stock trades about -0.04 of its potential returns per unit of risk. The Cronos Group is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 281.00 in Cronos Group on October 13, 2024 and sell it today you would earn a total of 2.00 from holding Cronos Group or generate 0.71% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Canoe EIT Income vs. Cronos Group
Performance |
Timeline |
Canoe EIT Income |
Cronos Group |
Canoe EIT and Cronos Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Canoe EIT and Cronos
The main advantage of trading using opposite Canoe EIT and Cronos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canoe EIT 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.Canoe EIT vs. Dividend 15 Split | Canoe EIT vs. E Split Corp | Canoe EIT vs. Global Dividend Growth | Canoe EIT vs. Dividend Growth Split |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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