Correlation Between Blockmate Ventures and Cronos

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

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

Diversification Opportunities for Blockmate Ventures and Cronos

-0.52

Correlation Coefficient

Blockmate Ventures  Cronos

Excellent diversification

The 3 months correlation between Blockmate and Cronos is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Blockmate Ventures and Cronos Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cronos Group and Blockmate Ventures 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 Blockmate Ventures 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 Blockmate Ventures i.e., Blockmate Ventures and Cronos go up and down completely randomly.

Pair Corralation between Blockmate Ventures and Cronos

Assuming the 90 days trading horizon Blockmate Ventures is expected to generate 7.18 times more return on investment than Cronos. However, Blockmate Ventures is 7.18 times more volatile than Cronos Group. It trades about 0.23 of its potential returns per unit of risk. Cronos Group is currently generating about -0.02 per unit of risk. If you would invest  3.00  in Blockmate Ventures on September 20, 2024 and sell it today you would earn a total of  20.00  from holding Blockmate Ventures or generate 666.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Blockmate Ventures  vs.  Cronos Group

Blockmate Ventures

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Blockmate Ventures are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Blockmate Ventures showed solid returns over the last few months and may actually be approaching a breakup point.

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 current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Blockmate Ventures and Cronos

The main advantage of trading using opposite Blockmate Ventures and Cronos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blockmate Ventures 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.

The idea behind Blockmate Ventures and Cronos Group 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.