Correlation Between SF Sustainable and Cronos Immo

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

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

Diversification Opportunities for SF Sustainable and Cronos Immo

0.39

Correlation Coefficient

SF Sustainable  Cronos Immo

Weak diversification

The 3 months correlation between SFPF and Cronos is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding SF Sustainable Property and Cronos Immo Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cronos Immo Fund and SF Sustainable 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 SF Sustainable Property are associated (or correlated) with Cronos Immo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cronos Immo Fund has no effect on the direction of SF Sustainable i.e., SF Sustainable and Cronos Immo go up and down completely randomly.

Pair Corralation between SF Sustainable and Cronos Immo

Assuming the 90 days trading horizon SF Sustainable is expected to generate 1.1 times less return on investment than Cronos Immo. But when comparing it to its historical volatility, SF Sustainable Property is 1.18 times less risky than Cronos Immo. It trades about 0.28 of its potential returns per unit of risk. Cronos Immo Fund is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest  11,950  in Cronos Immo Fund on September 29, 2024 and sell it today you would earn a total of  650.00  from holding Cronos Immo Fund or generate 5.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.0%
Values	Daily Returns

SF Sustainable Property  vs.  Cronos Immo Fund

SF Sustainable Property

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in SF Sustainable Property are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly stable basic indicators, SF Sustainable is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Cronos Immo Fund

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Cronos Immo Fund are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly sluggish technical and fundamental indicators, Cronos Immo may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with SF Sustainable and Cronos Immo

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

The idea behind SF Sustainable Property and Cronos Immo Fund 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.