Correlation Between Crown LNG and Cadiz Depositary
Can any of the company-specific risk be diversified away by investing in both Crown LNG and Cadiz Depositary 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 Crown LNG and Cadiz Depositary into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Crown LNG Holdings and Cadiz Depositary Shares, you can compare the effects of market volatilities on Crown LNG and Cadiz Depositary 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 Crown LNG with a short position of Cadiz Depositary. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crown LNG and Cadiz Depositary.
Diversification Opportunities for Crown LNG and Cadiz Depositary
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Crown and Cadiz is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Crown LNG Holdings and Cadiz Depositary Shares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cadiz Depositary Shares and Crown LNG 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 Crown LNG Holdings are associated (or correlated) with Cadiz Depositary. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cadiz Depositary Shares has no effect on the direction of Crown LNG i.e., Crown LNG and Cadiz Depositary go up and down completely randomly.
Pair Corralation between Crown LNG and Cadiz Depositary
Assuming the 90 days horizon Crown LNG Holdings is expected to generate 25.78 times more return on investment than Cadiz Depositary. However, Crown LNG is 25.78 times more volatile than Cadiz Depositary Shares. It trades about 0.15 of its potential returns per unit of risk. Cadiz Depositary Shares is currently generating about 0.33 per unit of risk. If you would invest 2.40 in Crown LNG Holdings on August 24, 2024 and sell it today you would earn a total of 0.61 from holding Crown LNG Holdings or generate 25.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Crown LNG Holdings vs. Cadiz Depositary Shares
Performance |
| Timeline |
| Crown LNG Holdings |
| Cadiz Depositary Shares |
Crown LNG and Cadiz Depositary Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crown LNG and Cadiz Depositary
The main advantage of trading using opposite Crown LNG and Cadiz Depositary positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crown LNG position performs unexpectedly, Cadiz Depositary 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 Cadiz Depositary will offset losses from the drop in Cadiz Depositary's long position.| Crown LNG vs. Eni SpA ADR | Crown LNG vs. BP PLC ADR | Crown LNG vs. Ecopetrol SA ADR | Crown LNG vs. Suncor Energy |
| Cadiz Depositary vs. Atlanticus Holdings Corp | Cadiz Depositary vs. LifeMD Preferred Series | Cadiz Depositary vs. Aquagold International | Cadiz Depositary vs. Morningstar Unconstrained Allocation |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |